Ashbrookes Group Limited Update and Why Loan Note Holders Should Be Worried

John Street: From “approval in principle” to refusal

If you hold an Ashbrookes Group Limited or S2 John Street loan note, this update should set alarm bells ringing. The Sunderland student accommodation scheme that was marketed in spring 2025 as having secured “approval in principle” for planning has now been refused outright. Ashbrookes’ own update admits that timelines, funding and repayments are sliding deep into 2026 and 2027.

In the meantime, interest is accruing but not being paid. Capital is locked in and cannot be returned. The development lender has also paused, leaving investors exposed with little clarity on what happens next.

Insolvency & Law has repeatedly highlighted the risks surrounding Ashbrookes-linked loan notes and the wider ecosystem around them:

• Security trustee concerns: Alpha Trustee Services Limited acts as Security Trustee for Ashbrookes loan notes. Independence and enforcement are critical, but questions remain over whether this trustee will act in the interests of loan note holders. We have blogged on Alpha Trustee Services previously here.
• New Capital Link: Ashbrookes has connections to New Capital Link and convicted fraudster James Baird. This association raises serious concerns about governance and investor protection.  We have blogged on Ashbrookes Group Limited connection to convicted fraudster James Baird and New Capital Link here.
• The loan note cycle: Experience shows that once schemes like this start to unravel, loan note holders often face drawn-out processes with very limited recovery prospects.

The message is clear: this is not a time to sit back and hope for the best. Loan note holders must recognise that the risks are escalating, and that waiting passively for a tidy exit is gambling on a scenario where everything goes right.

Timeline of Events

In late April, Ashbrookes promoted what many investors believed was a green light: “approval in principle” from Sunderland’s planning committee. But that approval was never final. It depended on signing a Section 106 legal agreement, which included a contribution toward coastal mitigation.

Throughout the summer, councillors openly warned that if the Section 106 agreement was not signed on time, the application would be refused. By early September, that is exactly what happened. With the S106 still unsigned, the council formally refused the application.

This was not a minor delay. It effectively reset the planning process back to the start. Ashbrookes now claims it will re-submit the application and attempt to run the S106 process in parallel. But until a new decision notice is issued, the John Street project has no valid planning consent.

Lending Consequences

The planning refusal has hit the project where it hurts most: its financing. In Ashbrookes’ own update to investors, the senior development lender has already paused its application until planning is re-approved. That pause is not a formality, it is a full stop.

To move forward, Ashbrookes now needs a re-stated valuation to keep the numbers alive, and potentially a brand-new credit application. Anyone familiar with development lending knows what this means: more time, more hurdles, stricter conditions, and lenders asking tougher questions. And as the months tick by, the risk grows that those terms harden or the funding disappears altogether.

Without that facility, the site cannot restart. And without a restart, completion dates stretch further away and loan note redemptions slip deep into the future. For investors, this is not just a delay; it is a direct threat to repayment.

Consequences for Loan Note Holders

For loan note holders, the consequences could not be clearer: your money is stuck further out of reach. Ashbrookes’ own FAQs admit that while interest continues to accrue at one percent per month, it is not being paid. Capital redemptions are off the table until the very end of the development cycle. In plain terms, that means no money flows back until the scheme is completed and either refinanced or sold.

This is not a minor delay. It is an admission that your returns depend on a fragile chain of future events: first, Ashbrookes must secure a new planning permission, then it must re-open a development facility, then it must actually build and complete the project, and only then can a refinance or sale unlock cash.

For loan note holders, that is a long, uncertain road. Every missed milestone pushes repayment further away, while your exposure and risk remain firmly in place.

What About the Security Trustee?

Security oversight is the lifeline investors often forget until it is too late. When Castle Trust & Management Services Ltd collapsed, Ashbrookes quietly shifted the role of trustee to Alpha Trustee Services. On paper, that sounds like a safeguard. In practice, a trustee only protects you if three conditions are met:

• The deed clearly charges verifiable assets.
• Enforcement triggers are spelled out, not left vague.
• The trustee is prepared to act the moment payments falter.

That is not a reason to panic, but it is a reason to get proactive. Do not take glossy marketing or “we’re looking after you” statements at face value.

As a loan note holder, you are a beneficiary under the trust deed. That gives you the right to demand information. Write to Alpha and ask:

• For a copy of the deed itself, in plain English.
• A schedule of what assets are actually charged, with Companies House charge numbers.
• Your ranking against any senior lender.
• The latest monitoring report.
• Confirmation that the planning refusal and lender pause have been logged as potential events of default.
• A commitment to provide regular updates until planning and funding are demonstrably back on track.

If you receive slow, vague, or evasive replies, do not shrug and move on. Escalate, and do it collectively. Coordinate with other note holders so your requests carry weight. Trustees respond faster when they know creditors are organised and watching.

What can Loan Note Holders do?

1. Replace narrative with documents. Request formal evidence of the re-submission: the new application reference, validation date and the target decision date; the S106 heads of terms and a realistic timetable to execution; the lender’s written position on whether the paused case is being kept alive or restarted, along with proof of the valuation re-statement. Ask for the conditions under which interest payments will resume, and the basis on which capital will be repaid if provisional dates slip again. 

2. Verify independently. Track the application and S106 through the council’s portal and wait for published status changes and the decision notice; don’t substitute emails or summaries for official documents.
   
   
3. Organise. A small group of loan note holders asking joined-up, document-led questions usually secure clearer answers than isolated individuals. 

4. Take independent specialist advice.  Contact Insolvency & Law to discuss your options.

Your Position, Right Now

The facts could not be clearer. Right now, the John Street scheme has no planning permission. The senior development loan is paused until new approval is granted. Interest may accrue on paper, but it is not being paid. Capital will not be returned until a building is fully constructed, funded, and let. And even under the “best case” scenario, the earliest repayment date being floated is April 2027, a promise built on a long chain of ifs.

This does not mean recovery is impossible. But it does mean that hope alone will not secure your money. Loan note holders must anchor their expectations to hard evidence: dated milestones, signed approvals, and confirmed funding. Anything less is noise.

And here is the real takeaway: you are creditors. Act like creditors. That means coordinating with each other, pressing for transparency, and escalating if milestones slip or assurances turn vague. Waiting passively for good news is not a strategy. Watching closely, asking the hard questions, and holding the right people to account is the only way to protect your position.

Lastly

If you hold loan notes in Ashbrookes Group Limited or associated companies, you should seek clarity on your position without delay.  Insolvency proceedings may already be in motion, and timing can directly affect recovery prospects. 

Contact Insolvency & Law’s investigations team today at investigations@insolvencyandlaw.co.uk to discuss your situation and explore recovery options.

Disclaimer: Logos used in this post are for identification and commentary purposes only. Insolvency & Law Ltd is not affiliated with, endorsed by, or acting on behalf of any company named. Use is permitted under fair dealing provisions for reporting, criticism, and matters of public interest.

Disclaimer: Insolvency & Law Ltd is not a firm of solicitors or licensed insolvency practitioners and does not provide legal advice, investment advice, or any regulated services under the Legal Services Act 2007 or the Financial Services and Markets Act 2000. All content published by I&L relating to the Ashbrookes Group Ltd related companies, including blogs and podcasts, is provided free of charge for general information and educational purposes only. Therefore, it must not be relied upon as professional advice.

Where appropriate, I&L may take legal assignment of loan notes issued by Ashbrookes Group Limited and related companies in its own name, for the purpose of enforcement and recovery. In such cases, I&L bears all associated costs and risks. The original loan note holder is fully insulated from legal expense and liability.