High Street GRP – The Security That Never Was…

High Street GRP promised investors that their money was safe — secured against valuable real estate. In reality, there was no meaningful security, and over £126 million in investor funds were lost. This article outlines how misrepresentation, weak legal protections, suspicious asset transfers, and failed oversight enabled one of the most damaging collapses in the off-plan loan note market.

1. The False Promise of Security

Marketing the Loan Notes as Secured Investments
When High Street GRP (HSG) issued its loan notes, they were aggressively marketed as “secured” investments. Castle Trust & Management Services Ltd, the appointed security trustee, gave the scheme a façade of legitimacy. Investors were told that their money was backed by tangible assets — primarily UK property developments.

These representations weren’t just promotional fluff — they were central to convincing hundreds of private investors that their funds were low-risk. HSG claimed that in the event of default, the underlying real estate would be sold or held as collateral to repay investors. This assurance was repeatedly reinforced in marketing literature, calls with sales representatives, and even legal documents.

The Reality: No Charges at Land Registry

However, once investigated, it was discovered that none of the associated properties had any charges registered in favour of Castle Trust. There was no crystallised debenture, and thus no genuine security. Investors believed they had a safety net, but in truth, High Street GRP had the freedom to deal with the properties without restriction.

The illusion of security was instrumental in the scale of the fundraising effort. Many would not have parted with their money had they known the truth.

2. Castle Trust & Management Services Ltd – An Enabler, Not a Safeguard

Castle Trust, regulated by the Gibraltar Financial Services Commission, appeared to act as a protective body. In reality, its role was largely passive, offering very little actual protection for noteholders.

What Our Legal Team Found:

• Limited Enforcement Power
  The Security Trust Deed placed strict limitations on Castle Trust’s ability to act. It was only required to enforce security if directed by a 75% special majority of noteholders — an unrealistic threshold for fragmented private investors.
• Right to Decline Action
  Even when such a majority was achieved, Castle Trust could decline to act unless fully indemnified or if it believed action wasn’t in the noteholders’ best interest.
• Minimal Trustee Duties
  Castle Trust’s duties were extremely narrow. It was protected by a wide range of exemption clauses that shielded it from liability unless gross negligence, fraud, or wilful default could be proven.

While the Companies Act 2006 (Section 750) prohibits exemption clauses from excusing breaches of trust due to a lack of diligence, these provisions were largely ineffective given the pared-back responsibilities accepted by Castle Trust.

• Suspicious Special Resolution
  On 1 June 2021, a resolution allegedly passed by a special majority of noteholders stripped individuals of their right to redeem their loan notes early. It also allowed Castle Trust to permit the company to grant security ranking ahead of the existing debentures. The circumstances around this resolution remain controversial — no satisfactory evidence has ever been produced to verify the vote.

Together, these legal frameworks provided Castle Trust with maximum protection and minimum obligation, while allowing High Street GRP to operate as if security was in place.

3. The Suspicious Transfer of Assets to Hadrian Real Estate PLC

Just prior to entering administration, High Street GRP transferred significant assets to Hadrian Real Estate PLC — a company from which Gary Forrest had resigned only months earlier. This transfer raised numerous red flags and potential legal breaches under the Insolvency Act 1986.

Key Areas of Concern:

• Transactions at Undervalue (Section 238)
  If assets were sold or transferred for significantly less than their true market value, the court could reverse these deals or order Hadrian Real Estate to compensate the insolvency estate for the shortfall.
• Preferences (Section 239)
  If HSG treated Hadrian Real Estate more favourably than other creditors — including loan noteholders — the transaction could be reversed.
• Fraudulent or Wrongful Trading (Sections 213 & 214)
  If directors continued trading while knowing HSG was insolvent, or knowingly transferred valuable assets out of reach of creditors, they could be held personally liable.
• Misfeasance or Breach of Duty (Section 212)
  Directors have a duty to act in the best interests of creditors when a company is insolvent. If they instead prioritised Hadrian Real Estate, that duty was breached.

Insolvency & Law applied for a Norwich Pharmacal Order (NPO) to force disclosure of the Sales & Purchase Agreement (SPA) between HSG and Hadrian Real Estate. That SPA was expected to provide essential evidence of wrongdoing, including the value of assets transferred and the rationale behind the transactions.

4. Administrator Failures: Carrie Ann James and Tony Hyams

After Castle Trust’s failure to act, the next opportunity for investigation and recovery lay with the administrators. Investors hoped that proper insolvency practices would at least reveal the truth, if not recover value. Unfortunately, the conduct of administrators Carrie Ann James and Tony Hyams fell far short of expectations.

In summary, they:

• Failed to investigate the asset transfers to Hadrian Real Estate.
• Ignored potential breaches of fiduciary duty and misfeasance.
• Refused to disclose key documents without excessive legal costs.
• Having spent an insignificant number of investigatory hours on HSG given the scale of the Administration, they accrued over £1 million in administration fees with no recovery for creditors.

Despite full visibility into the suspicious transactions, they took no action to challenge or reverse the deals. When Insolvency & Law requested key documents, James initially agreed, but later imposed high legal costs as a barrier. Hyams, meanwhile, remained complicit through silence.  

Eventually, after years of inactivity and stonewalling, High Street GRP was forced into compulsory liquidation. But even then, James and Hyams retained crucial files, further obstructing transparency.

A winding-up hearing for Hadrian Real Estate PLC on 12 March, brought by HMRC, confirmed that the transferred assets were effectively worthless. This validated claims that HSG’s asset transfers had been fraudulent and intentionally damaging to creditors.

5. Key Takeaways for Investors

This case offers a powerful warning to any investor considering unregulated investments marketed as “secured.”

• High Street GRP’s loan notes were never truly secured. No charges were registered, and no assets were protected.
• Castle Trust’s legal framework favoured the company, not the investor. Its role was limited, passive, and insulated from liability.
• Suspicious asset transfers were never investigated. HSG was able to move valuable assets to another entity without resistance.
• Administrators failed to uphold their duties. Over £1 million was spent with no recovery, and critical information remains withheld.

Before investing in any scheme involving a security trustee:

1. Demand the full Security Trust Deed and seek independent legal advice.
2. 2Verify if charges are registered at the Land Registry.
3. Be sceptical of promises of “secured” investments without full transparency.
4. 4.Be cautious of administrators or trustees who benefit more from silence than action.

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