Harlequin Management Services (South East), which trades as Harlequin Property, has filed a notice of intention to appoint administrators at the High Court of Justice.
The intention is to appoint Shipleys as administrator, according to a court document which was signed by Carol Ames, wife of Harlequin director David Ames and also a director of the company.
An interim moratorium is now in place with the effect that legal action can not be taken against the company at the present time, a letter from Harlequin seen by IFAonline said.
Gareth Fatchett, partner at law firm Regulatory Legal which acts on behalf of hundreds of investors in Harlequin, said: "This is serious for investors.
"The Harlequin Investor Group will now be looking at how best to protect investor interests in the Caribbean. An update for investors will be published from www.harlequininvestorgroup.co.uk for investors in the next 24 hours."
The Harlequin Property scheme - which investors have put about £200m into - has been dogged by problems in recent months.
This month the UK-based overseas property sales agent, which is at the centre of a Serious Fraud Office (SFO) investigation, lost its second auditor in under three years.
The SFO has launched a joint investigation with Essex Police into complaints in relation to the Harlequin group.
The SFO has opened an online questionnaire asking investors for details about their investments and who introduced them to the group.
IFAonline revealed weeks ago that Harlequin is having "severe" problems issuing payments due under the terms of its agreement, with some investors having payments missed for the second consecutive month.
Under the terms of its agreements with investors, Harlequin pays the interest on borrowings where investors have re-mortgaged their homes to invest in a Harlequin property in the Caribbean.
The interest is supposed to be paid until the completion of the off-plan property the investor has invested in.
Harlequin Property was also the subject of an alert by the Financial Services Authority (FSA), in which the regulator issued a warning to financial advisers about investing clients' money in Caribbean property through Harlequin.
The FSA has also contacted self-invested personal pension providers asking them for details of members' holdings in Harlequin.
In a statement regarding the administration, Harlequin said "unfounded negative publicity" had led to the decision.
"The day-to-day UK sales business of Harlequin Property has become increasingly challenging, to the point that it is now almost impossible.
"The last few months have given Harlequin the chance to restructure its business to attract new outside investment and develop properties in accordance with the sales made via Harlequin Property.
"The first stage of this restructure is for the directors to place Harlequin Property into administration via a notice of intention to appoint administrators.
"Harlequin Property has supported the Caribbean resort development companies over the years but is not, in its current form, an essential component to the future business of Harlequin in its role of delivering investments as a developer and hotel operator."
The directors maintain that Harlequin Management Services "can be rescued", and said investors can be assured that the company sees "no reason why these circumstances would threaten their investment in Harlequin".
"The administration procedure will give Harlequin Property some breathing space and the ability to deal with its challenges.
"The underlying business model of the Harlequin group is strong and the directors are confident that, with the external finance and property completions anticipated, our investors will see significant development at our resorts in the near future."
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