'Financial tricks' claim is denied by developer

A MAJOR West Country developer has strenuously denied using accounting tricks to avoid paying creditors associated with a housing development in Bruton.

- DANIEL MUMBY

The Acorn Property Group and Landhouse Development Ltd jointly secured planning permission from South Somerset District Council in March 2017 to build up to 68 homes on the A359 Cuckoo Hill, at the north-eastern edge of Bruton.

The Cubis Bruton development, also known as Longcroft, has been subject to numerous obstacles, with Acorn having to step in after its initial contractor, WRW Construction Ltd, entered administration in July 2021. In the face of a £4.6m loss on the site, the Bristol-based company has been accused by Landhouse of "phoenix-ing" its accounts a manoeuvre which enables companies to avoid paying creditors by transferring assets from one company to another.

Acorn has strongly denied that any phoenixing took place, confirming it will bear the full brunt of the financial loss and is committed to delivering the remaining homes within the site as well as another development elsewhere in the town.

Phase one of the Cubis Bruton development was carried out using a special purpose vehicle (SPV) - a legal entity set up for a specific project to isolate risk to the companies involved.

The phase one SPV, Acorn (Bruton), entered administration on January 20, 2024, with its records showing it was £4.6m in debt. The SPV's assets for the remaining three phases of the development were transferred to a new SPV, Acorn (Bruton) 2.