Businessman loses control of three firms after judge’s ruling

Businessman Gavin Woodhouse has lost control of three of his companies after a judge decided his business model appeared to be “thoroughly dishonest”.

Seven creditors who have invested millions in Woodhouse’s business bought the case to the High Court.

And their calls to hand his businesses over to administrators was backed by High Court judge Sally Barber.

She said: “This appears to be a thoroughly dishonest business model and a shameful abuse of the privileges of limited liability trading.

“I am entirely satisfied by the evidence before me that this court must take immediate action.”

The judge ordered the immediate appointment of Phil Duffy and Sarah Bell, of insolvency firm Duff & Phelps, as interim managers of three businesses.

The ruling applies to MBI Hawthorn Care Ltd in Burnley and MBI Clifton Moor Ltd in Tyldesley in Greater Manchester.

The third firm is an adventure park in South Wales backed by TV presenter Bear Grylls.

The judge said she was “entirely satisfied” that the court needed to take “immediate action”.

She said: “This is not just insolvency it is what has been going on behind the curtain of limited liability. These intercompany loans have been written off in their millions. This is investors’ money.”

Woodhouse raised millions of pounds about five years ago from private investors to fund four care homes – none of which are openand three of which have not been built.

Millions of pounds from the care home projects were loaned to another company in which Woodhouse owns 60% of the shares but that company has gone into administration.

Judge Barber said: “These are serious, serious, matters.

“They are not unsubstantiated. They are based fairly and squarely on the company’s own records.”

She added: “I do not accept that submission that the case is not urgent.

“Ordinary members of the public have collectively invested millions of pounds into three companies. They have been led to believe that their investment monies were ringfenced and used only for particular projects. This was untrue.

“Instead their monies were paid out, often by so-called intercompany loans to other companies under the same ownership, with little or no prospect of recovery. In a number of cases such loans, running into millions, have been written off as irrecoverable already.”

The businessman is also chief executove of Northern Powerhouse Developments which own a series of hotels across the North and North Wales.