The company entered insolvency proceedings in 3 October 2016. A third application by Harlequin chairman David Ames, for an extension from 30 January to 15 March to file its proposal, was rejected on Friday.
Justice Clare Roberts ruled that Harlequin had not demonstrated that they were deserving of an extension, reports local newswire Searchlight.
A spokesperson for the property scheme said the company will appeal the decision.
Court date
Thousands of, mostly, British pensioners invested around £400m ($498m, €471m) into the unregulated scheme via UK financial advisers, which offered guaranteed returns of 10% from luxury villas.
The proposal from Harlequin involves the transfer of all shares in the company to investors/creditors and the appointment of a new hotel operator to manage the flagship Buccament Bay Resort, which has been closed since December after Harlequin failed to pay suppliers.
Ames previously stated that the move will help save investor’s their money, despite KPMG recommending bankruptcy as a better option for investors.
In an update to investors on Monday, the company said: “As things stand, this means that HP SVG investors would not be allowed to vote on the proposal and liquidation would ensue. This has come in spite of HP SVG filing the finished proposal with KPMG earlier on Friday and before the judge reached his decision.
“However, please be assured that Harlequin will appeal the court’s decision and continue to fight for your right to vote on the proposal and avoid liquidation.”
The company had expected the hearing to “be straightforward” but believe that the judge refused the extension request because of:
- the position of the government of St Vincent and the Grenadines (claiming just £75,000);
- the arguments put forward by the Financial Services Compensation Scheme (FSCS) (holding circa 10% of the voting rights on a proposal) seen to be acting on behalf of the British government;
- the surprise that the Serious Fraud Office has charged Ames.
Harlequin will appeal the decision and “has been advised by counsel in the Caribbean that it has a strong prospect of overturning it in the coming weeks”.
“It is our belief that a grave injustice has been perpetrated and neither Harlequin nor our investors will stand for it.”
