Developer requests early payment from investors to avoid schemes collapsing

Liverpool developer Elliot Lawless has threatened to collapse two Liverpool schemes unless investors provide financial support.

Mr Lawless, boss of the Elliot Group, was arrested on December 18, 2019, at his Liverpool city centre flat on suspicion of conspiracy to defraud, bribery and corruption.

The same day, Nick Kavanagh, 50, Liverpool City Council’s director of regeneration, was arrested in his office on suspicion of conspiracy to defraud and misconduct in a public office.

Neither of the men has been charged with any offence and police investigations are continuing.

Earlier this month police seized £200,000 from a property linked to Mr Lawless.

Work was halted on two of the Elliot Group’s schemes last week – Aura, a £100m student scheme on the edge of the city’s Knowledge Quarter, and the £250m Infinity scheme on Leeds Street.

In a letter to investors in both schemes, seen by the Liverpool ECHO, Mr Lawless told them that Maslow Capital, the preferred debt funder, has pulled out.

He has asked investors for earlier repayments – a 25% deposit of the full purchase price by the end of this month, and a further 10% deposit by the end of July.

Mr Lawless has offered to invest £7m himself to ensure completion of the projects.

But he warns that he could be forced to fold the projects if he fails to receive sufficient payments.

His letter says: “I cannot stress strongly enough that this internal funding by us is a necessity and if we do not get buy in from all investors we have been advised to place the Company into some form of insolvency process, which could take the form of creditors voluntary arrangement (a CVA) or an administration.

“This early funding by you, together with the cash injection by me, will ensure that the scheme has the necessary funds to pay all of the outstanding construction costs.”

Investors have been told that in return for earlier payments they would be rewarded with certain benefits, including being paid 3% interest on such deposits.

It is understood that construction firm Vermont will re-start work on the sites once sufficient funds have been secured.

A spokesman for the Elliot Group said investors in the project are “experienced and understand our model, and their lawyers and agents are in communication with us about their investment needs”.

He added: “As a demonstration of Elliot Group’s commitment to the project, it has made a commitment to fund up to £7m of the construction costs from its own resources.

“This funding, together with the funding requested from its existing investors, will ensure that the development will be successfully completed.

“Our retained contractor, Vermont Construction, has confirmed it will commence works on site as soon as this funding is secured.”