Troubled overseas property group Harlequin has agreed an "in principle" deal with a law firm representing investors to move their investments into a secure trust.
Harlequin - which has taken about £400m from investors to invest in properties across the Caribbean - has been rocked by problems since the start of the year, including three warnings by the regulator, investigations by the Serious Fraud Office and the Insolvency Service, and its sales arm going into administration.
In a bid to regain their confidence, investors will be invited to become members of a trust, which would hold a charge over the remaining registered land at Harlequin's flagship resort, Buccament Bay, that is not already allotted to investors' properties, including all of the facilities.
Although the trust will initially be open to Buccament Bay Resort investors, there is potential for it to include all investors, said Harlequin.
It is anticipated that the legal structure of the security arrangement will be executed before the end of October 2013, according to the law firm representing investors, Regulatory Legal.
In order for investors to secure their investment, Harlequin and Regulatory Legal Solicitors are urging all Buccament Bay investors to entertain this plan and become involved as a member of the trust.
Harlequin said the trust's charge would not affect purchasers who are completing on units within Phase 1a of Buccament Bay as those properties have already been subdivided to enable them to receive their deeds on completion. It would also not impact on development, general running of the resort, nor the introduction of external finance, it said.
Members of the trust would be represented by selected trustees, who would be chosen based on their skills and experience relevant to hotel development, according to Harlequin.
The move is the first part of Harlequin's restructuring process to be announced, with more news expected in the coming weeks.
Harlequin Hotels & Resorts chairman Dave Ames said: "This is a positive step forward that will benefit investors all-round as the confidence it brings will also assist with acquiring external finance, which will accelerate the continued development of the resort.
"The Prime Minister of St Vincent and the Grenadines has assured me that the new international airport will open next year, so I am keen that construction recommences at the resort as soon as possible."
Investors will be asked to consider legal advice on the proposed trust with a view to signing them up as soon as possible.
The chairman isn’t answering his email
Reforms not enough
An economic cocktail
To encourage consumers to shop around
Will report to Pat Shea