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Investors in failed mini-bond firm Harewood Associates have been told they will get back no more than 16p for every pound they invested.
Bolton-based Harewood had invested £32m in housebuilding. It attracted 1,400 customers, who could buy fixed-rate bonds with returns of up to 15pc or get a share of profits from completed properties.
Consumers could invest from £5,000 to £1m in the firm’s deals, but are now being told they are unlikely to get much of their money back.
A spokesman for Begbies Traynor, the administrators, said: “The proposals issued to creditors anticipate a range of returns between nil and 16p in the pound. The return is subject to realisations of debts due from associated companies.”
The mini-bond firm is owed £40.7m from related companies, according to its 2018 accounts, which are typically those in the same ownership group or with shared directors.
It is also owed £38,900 from non-related companies and made an overall loss before tax of £4.3m last year.
Harewood was unregulated and so investments are not covered by the Financial Services Compensation Scheme, a lifeboat fund.
Telegraph Money has previously warned of the risks of losing money with firms such as Harewood, which has operated since 2010.
Harewood’s collapse follows that of London Capital & Finance in January (LCF).
LCF sold mini-bonds promising returns of up to 11pc a year but went into administration after taking £236m from more than 11,500 savers.
If you have been affected by Harewood or LCF, email sam.barker@telegraph.co.uk
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