Harlequin Boss David Ames Faces Bankruptcy Hearing

Chairman of the troubled Harlequin Property group David Ames is facing a bankruptcy hearing brought by a group of investors.

A bankruptcy petition, due to be heard on 1 November at Southend County Court, is against Mr Ames personally, and if it succeeds it will mark his third bankruptcy.

According to a Harlequin spokesperson lawyers for Mr Ames and his wife Carol “are liaising with the petitioners’ lawyers and are confident that the hearing will not go ahead”.

If Mr Ames is declared bankrupt, control of his assets will fall to an insolvency practitioner appointed to deal with them.

Harlequin has previously denied the wider company would be affected by this.

David Ames
David Ames

But as Mr Ames is sole owner of all of the companies that have land and assets within the Harlequin group – which are mainly in the Caribbean and include Harlequin’s flagship resort Buccament Bay in St. Vincent & Grenadines – these are likely to be included in any insolvency process.

It could potentially see Harlequin Property – into which thousands of mainly UK pension investors have poured £400m – broken up and the assets sold off to pay Mr Ames’ creditors.

The bankruptcy case is being brought by a group of 24 Harlequin investors known as the Davies 24, and relates to an earlier settlement agreed in 2014 in which Mr Ames agreed to pay them £1.3m to drop their case against him.

According to a Harlequin spokesman, more than £1m of the settlement has been paid, and the figure outstanding is approximately £212,000.

Originally agreed in October 2014, the settlement was to end a case in which the investors alleged Mr Ames and his wife Carol made false claims about the risks involved in investing in Harlequin.

Around 6,000 mainly pension investors invested around £400m into the unregulated investment scheme run by Harlequin Property, on the promise of guaranteed returns of 10 per cent a year from luxury overseas properties.

However only a handful of the properties were built, and most investors have been left without either their capital or any of the promised returns.

The 2014 settlement was upheld in February 2016 by the High Court after Mr Ames tried to have it overturned.

In the judgement from the February ruling, Judge Mrs Cox ruled that the group of 24 Harlequin investors “are still entitled to the sum that [the Ames’] agreed to pay in the settlement agreement entered into as long ago as 20 October 2014”.

She added that Mr Ames attempt to annul the deal “has all the hallmarks of an attempt by the [Ames’], made very late in the day, to avoid their obligations under that agreement”.

The bankruptcy case is one on at least two fronts Mr Ames is fighting.


FTAdviser revealed earlier this month that Harlequin Property SVG, the part of the group which owns the land associated with the investment scheme, has formally entered insolvency proceedings, which could lead to its liquidation and heavy losses for thousands of investors.

According to a spokesman for Harlequin, it has taken the insolvency action to “allow the company a maximum of six months to work with a professional trustee to assist it to sort out its business affairs”, and does not amount to an admission of bankruptcy.

If proposals put forward by the appointed insolvency practitioner are not viable or are rejected by Harlequin investors then Harlequin is likely to enter into formal liquidation.

If that happens, Harlequin’s land and hotel assets – including its flagship Buccament Bay and Merricks resorts – will be sold off and the proceeds distributed among investors, after insolvency costs.

That would likely mean serious losses to Harlequin investors, including those who have provided extra money to Harlequin SVG to complete the purchase on Buccament Bay properties.

Harlequin has faced trouble since early 2013, has been the subject of several warnings from the Financial Conduct Authority, and is mired in a Serious Fraud Office investigation as well as several legal cases.

Mr Ames is currently under investigation in Saint Vincent in connection with allegations of tax evasion and theft amounting to $8m East Caribbean dollars (£2.3m).

First Published Ftadviser By Laura Miller

Leave a Reply

Your email address will not be published. Required fields are marked *