Student Developments Driving Out Coventry's Businesses
20th Jul 2018
Private investors are launching a legal claim against a law firm and insurance broker after deposits worth £6.8m were lost when a student accommodation development failed.
Over 170 individuals had invested between £21,000 and £300,000 each when the developer behind the Enterprise House scheme in Leicester city centre went into liquidation during 2014.
According to investors, they were offered negligent advice prior to the investment and have commenced a claim against those involved.
The case centres on advice from both solicitors and the brokers that a bond provided by Northern and Western Insurance Company (NWIC) ensured investors would still be able to reclaim their deposits should the development fail.
The insurance providers and solicitors involved in the development failed to tell investors that NWIC was unrated, of questionable financial standing and unregulated in the UK, deeming any assurances regarding deposits worthless.
After the developers behind the scheme went into liquidation, NWIC also became insolvent, eliminating any possibility of claiming on the insurance investors believed was in place.
Enterprise House was designed to be a mixed-use development in the centre of Leicester, taking the place of the city's derelict International House. The proposals had called for 454 student bedrooms, along with shops, cafes, a gym and commercial units.
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