Bulgarian Dreams Watchdog Update

BBC's Watchdog programme did a followup on Bulgarian Dreams (including interviews with some people referred to the programme by OverseasCafe.com). 

The programme's website says:

"Since our broadcast we've discovered a lot more about Robert Jenkin and Bulgarian Dreams. He was selling apartments in over 30 developments across Bulgaria, so it's no surprise that we've now heard of hundreds of you who each paid him tens of thousands of pounds for properties that were never finished."

It finishes with a statement submitted by Jenkin, who refused to take calls from the programme:

Statement on behalf of Berkeley Square Trading Limited (T/A Bulgarian Dreams). 

"The decision to close the London sales and marketing office of Berkeley Square Trading Limited t/a Bulgarian Dreams doesn't mean that the company isn't committed to providing ongoing customer support services to clients who've purchased developments in Bulgaria where it's able to do so. Clients are aware of the telephone number and email address where ongoing queries can be addressed. Bulgarian Dreams will answer such queries if they're addressed to the Company directly, but it's not prepared to discuss individuals' issues on air."

You'll find the programme on BBC's Watchdog website. 

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Lynn Interviewed by Mail and Played on RTE

Ireland's most famous rogue solicitor, Michael Lynn was interviewed in last week's Mail on Sunday by Michael O'Farrell. Some of this interview was also played on Marian Finnucane's show on RTE at the weekend. 

The mail doesn't have it's Irish edition online but you'll find a scanned copy of the entire interview here. Page 1, Page 2, Page 3, Page 4 - click on the images to enlarge. You'll find a link to the interview on Marian Finnucane (presented by Rachel English) here (you'll need Real Player to play it). The Lynn interview kicks in at 0:34:18. Thanks to the guys at The Property Pin for both links.

Some excerpts from the interview include:

“If you wanted to get to the key question, did I act fraudulently in terms of, and had I two mortgages, three mortgages against the same property, ah, it's true I had extensive borrowings." Michael O'Farrell asks him, "But was it fraudulent?" To which Lynn replies: "Absolutely not, we were all, including myself, we were all following the ... I was the Celtic Cub, ah, who was out of control, honestly, in hindsight, I was greedy, ah, and over-ambitious, but yes there were other parties. I ... I'm sorry for what happened to them and I believe that right now the key question for me is that if I'm sorry I have to show it by actions as opposed to just words."

Lynn continues: "The truth is I want to go back, the life that I'm leading and the pressure ... I've a wonderful wife and she's been extremely loyal to me and loyal to us as a couple. I... I'm extremely lucky. I wouldn't see any reason why I would have to go to prison and the one thing I want to make clear is I'm not going to be a scapegoat for others, absolutely not, and I'm not going to be used as an example for what was recognised as an accepted form and practice of business by bankers, lawyers, accountants and auctioneers and I'm not going to be the poster boy who ends up in prison, to my cost. 

The Law Society responded in yesterday's Irish Times saying:

"The behaviour of Mr Lynn was shameful and disgraceful." Ken Murphy said that the society was still paying compensation from its fund to clients who had lost money because of his activities.

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Haydon Investments Clients take Legal Action

Vivion Kilfeather in the Irish Examiner reports that more than 50 investors are seeking the return of €8 million allegedly paid to two businessmen and an investment firm to fund a property scheme in the Ukraine since found to have defective legal title.

One investor said he had learned from documents he was "continually lied to about the whole investment project" and he also alleged the defendants treated the investors’ monies as their own personal monies.

Thomas Meyler said he believed the original €9.7m fund has reduced to €3.4m without any assets being acquired as the property was bought with a title since declared flawed.

The actions are being taken against Haydon (Private Clients) Ltd, trading as Haydon Investments Company (HIC), and Peter Haydon, with addresses at The Mall, Beacon Court, Sandyford, Dublin. Aidan Corless, of Kinvara, Westminster Road, Foxrock, Dublin, was also joined yesterday as a defendant.

It is claimed the defendants misused more than €5.2m of investors’ money to acquire a property at Kiev, Ukraine, in a manner intended to give the defendants additional profits unknown to the investors but the defendants ultimately acquired only defective title to the property.

It is alleged the defendants have continued to "waste" further monies over the past 18 months on legal fees and payments to themselves arising out of the defective title.

Mr Justice Peter Kelly was told yesterday it is being alleged investors transferred €8m to HIC under a scheme whereby it, using a Cypriot-based holding company Lemuranco Holdings Public Ltd and its Ukrainian-based subsidiary Lemuranco JSC Ukraine, would acquire a commercial property in Kiev.

Jarlath Ryan, who represents 46 investors and expects another nine to join the litigation, said no such interest was ever acquired. He said the investors had between them paid over sums of €7-8m.

He secured leave from the judge to serve short notice on the defendants of proceedings aimed at securing return of the monies and to prevent them reducing or dissipating assets.

In related earlier proceedings transferred to the Commercial Court yesterday, Quotumas Investments Ltd claims the Haydon defendants advertised in the Sunday Business Post in early March 2007 seeking investors for the Kiev project. Quotumas claims it invested €1m.

The firm claims the Kiev property was never purchased in the manner represented by the defendants to them and the Haydon defendants instead provided investment funds to Mr Corless to purchase the property in his own name. The defendants, it is alleged, were intent on creating an additional conveyancing layer so as to allow them sell on the Kiev property to the Cypriot company at a higher price, resulting in personal profit and gain to the defendants.

However, having purchased the property, it is claimed the defendants discovered their title in the property’s holding company, Allonge, was legally defective and Allonge’s ownership in the property was seriously flawed. Legal proceedings in Kiev ruled that the agreement by Allonge for the acquisition of the property was unlawful and void.

Counsel for Quotumas said it was endeavouring to establish the financial position of the Haydon defendants but documents discovered to date were unsatisfactory and tended to show the defendant company was insolvent. Counsel for Haydon said the documents had been given to Quotumas eight weeks ago and no complaint was received until now.

The judge said it would be a matter of concern for a company to continue to trade in a deficit situation. In an affidavit, Mr Meyler, a director of Quotumas, said Peter Haydon had represented himself as an investment and property expert with well-established relationships in the Ukraine with taxation, management, development and legal firms.

Mr Meyler said he agreed an oral contract to invest €1m by Quotumas on conditions including all investment monies would be held by the Cypriot firm that would purchase the Kiev property in its name and that Haydon had already invested US$2.25m (€1.7m) in the project.

He said Haydon did not make that investment but misrepresented they had and Quotumas later learned the Kiev property was not sold in the manner intended.

This story is from the Irish Examiner.

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Lynn Insurance Claims may not be Honoured

A report on the RTE website has claimed that insurance companies are moving to protect themselves against claims from those defrauded by Michael Lynn and his companies. The full report is below.

"Two insurance companies have secured court orders that effectively mean they will not have to pay out multi-million euro claims on many insurance policies taken out by missing solicitor Michael Lynn and his property company.

The order was granted because of alleged fraudulent misrepresentation and non-disclosure of material facts.

More than 250 claims against the policies have been made to date by banks and others. All are owed vast sums by Mr Lynn, who has estimated liabilities of some €80m.

In making the orders against Mr Lynn and his company, Mr Justice Peter Kelly noted the court has yet to determine whether Fiona McAleenan, a solicitor in Mr Lynn's firm, is entitled to insurance cover relating to any undertakings she signed while working in the practice.

In claiming they were entitled to refuse to pay out on foot of the policies, both companies argued the vast majority of claims related to alleged breach of residential mortgage solicitors' undertakings.

They claimed their investigations suggested a practice in Mr Lynn's firm, from at least 2003, of providing multiple undertakings relating to the same property but this practice was not disclosed to them.

The companies also claimed the defendants must have been aware they would not be able to comply with undertakings given on foot of the policies.

They alleged they were entitled to have declared void two particular policies taken out with them for alleged non-disclosure of material fact by the defendants and also said the policies should be declared void for fraudulent misrepresentation on the proposal form.

Chubb Insurance Company of Europ SA and WR Berkley Insurance Europe Ltd had taken the Commercial Court proceedings against Michael Lynn and Fiona McAleenan.

The insurance companies say the practised as Michael Lynn & Company, and Overseas Legal and Tax Services Ltd trading as Overseas Property Law.

Paul Sreenan SC applied for orders against Mr Lynn and Overseas, declaring the policies void on grounds of failure by Mr Lynn and Overseas to enter any defence in the case.

The proceedings against Ms McAleenan, of Betaghstown, Co Meath, will be heard at a later stage.

Mr Sreenan stressed his application was without prejudice to the claims made by Ms McAleenan. He said Ms McAleenan was defending the case on the basis she was not a partner in the firm and the insurance policy was a composite policy, not a joint policy.

In making the orders against Mr Lynn and Overseas, Mr Justice Kelly said the companies were entitled to have the policies declared void ab initio (from the beginning) because of non-disclosure of material facts and fraudulent misrepresentation on the part of Mr Lynn and Overseas.

The proceedings arose after the two companies agreed to provide cover for Michael Lynn & Company, the practice set up by Mr Lynn, and Overseas Property Law, which provided legal services for persons investing in overseas property.

The cover sought was professional indemnity cover in excess of the €2.5m primary cover to be provcided by AIG Insurance Company Ltd.

Chubb claimed, relying on representations of the defendants, it agreed to provide €4.5m cover for each claim in excess of €2.5m for the period from 1 January 2007 to 1 January 2008.

WR Berkley claimed it agreed, also in reliance on representations of the defendants, to provide (over the period 18 May 2007 to 31 December 2007) €4m cover for claims in excess of a €7m cover already in place.

Article from RTE.

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Bulgarian Dreams features on BBC Watchdog Programme

Bulgarian property agent & developer, Bulgarian Dreams, featured on a BBC Watchdog programme this evening. The programme followed the attempts of a Bulgarian Dreams client to contact the company. He visited Bulgaria only to be told by BD's office that they didn't have a phone number for Robert Jenkin, the company's owner. The client then went to speak with his solicitor who claimed he did not know what was wrong but everything was a "complete mess".

We have featured Bulgarian Dreams on the Blog on a number of occassions (and been legally threatened by their legal representatives, DLA Piper, to boot). If you wish to view previous postings to get an idea of what has been in train you'll find all postings mentioning the company here. There is also an article featuring a number of unhappy Bulgarian Dreams clients here and the Irish Times featured a piece on Bulgarian Dreams and its clients which can be found here.

The picture above, featuring Jenkin and his Bulgarian wife Maria Georgieva, featured heavily in the documentary as the Watchdog team failed to track Jenkin down to speak with him.

The programme concluded with the statement that Bulgarian Dreams (which is a trading name for Berkeley Square Trading Ltd.) had ceased trading due to the "extraordinarily difficult economic conditions" and that it wished its understanding customers "all the best for the future."

Nice one.

The Bulgarian Dreams website now features just the following message:

Dear all,

We regret to inform our customers that following the extraordinarily difficult economic conditions we have had to cease trading.

All existing customers who have previously purchased property should refer directly to the development companies in Bulgaria, none of which are directly affected by our closure. A list of contact details is included below:

Interlink BG Limited: interlinkbg@abv.bg

Smart Partners BG: smartpartners.bg@gmail.com

Interart Group: interart.group@hotmail.com

We would like to wish all our customers all the best for the future and thank them for their understanding at this difficult time.

Bulgarian Dreams

Here is the link to the BBC Watchdog programme for those affected by this issue. Unfortunately, depending on where you are accessing the content you may not be able to see the video. If it appears on You Tube we'll link to it here. In the meantime the transcript of the piece (which is also on the BBC Watchdog site, is below).

Buying property in England is difficult enough, but buying abroad can be a real nightmare as dozens of Watchdog viewers have found out. They've contacted us because they've all been taken in by the same company.

Bulgarian Dreams is a property business that promises new homes, in a country where the market has been booming. Each of the people we've spoken to has handed over tens of thousands of pounds and now they're worried they've lost it all.

Bulgarian Dreams has won awards, has glossy brochures and a snazzy website. It also offers the reassurance of a head office in London. Chris Dale was really excited about buying a piece of paradise and he thought he'd found an estate agent he could trust. In June 2006, Chris paid Bulgarian Dreams a £500 deposit for an apartment on a luxury development called Windows to Paradise.

Far from completed
Bulgarian Dreams put together a DVD which showed all the apartments it had on offer. It made it quite clear it'd do all the legwork and all Chris would have to do was move in. However Chris's Bulgarian Dream soon went flat. He paid a total of £56,000 for his apartment including solicitor's and management fees. Now, more than a year after the company wrote to him to tell him the development was completed it's far from it. Chris's apartment has no electricity or water. There are power cables on the ground that could potentially be live and rubbish everywhere.

Bizarrely, Bulgarian Dreams told Chris none of the problems with the apartments were anything to do with them. It was full of promises before the sale, but once it'd been paid it washed its hands of the whole thing and then stopped returning his calls. Bulgarian Dreams had said that Chris's contract was with the developers, a company called Interlink BG. He was told to contact the developer direct about any problems, but they haven't returned his calls or email either.

Same story
So far, more than 80 Bulgarian Dreams customers have contacted us with almost exactly the same story. In December, Bulgarian Dreams suddenly closed its London Office without telling its customers. But the company does have another office in the Bulgarian capital, Sofia. Chris Dale and Watchdog's Paul Heiney travelled out there in search of answers from Bulgarian Dreams and the couple who run it, Robert Jenkin and his Bulgarian wife Mariya Georgieva.

At Bulgarian Dreams' office Chris was told that it no longer had his money; that it had been paid to Interlink BG, the developer. So Chris and Paul crossed the city to Interlinks BG's registered office address but no one was there either. Unfortunately for Chris, Bulgarian Dreams has lied to him. It may claim it has nothing to do with the developers, but that simply isn't true. Records show boss Robert Jenkin is a former owner and director of Interlink BG. And his wife Mariya is still named as a company manager. In fact, after more digging, we've discovered one or both of them might have been acting not just as the estate agent and developer, but also the property management company, the supposedly independent solicitors, and even the furniture supplier.

Only last week, the company took down its website and announced it had ceased trading due to the "extraordinarily difficult economic conditions". It wished it's understanding customers "all the best for the future."

Bad man?
There's an old saying in Bulgaria - bad weather gets better, but a bad man never does. Is Robert Jenkin a bad man? We don't know. But certainly he persuaded a lot of people to part with a lot of money, for something they've never had. We've tried to contact Bulgarian Dreams but it's failed to respond and seems to have disappeared.

The Association of International Property Professionals advices anyone who's encountered difficulty with the purchase of their apartment through Bulgarian Dreams to contact a lawyer. Even if it does not end up going down the legal route, anyone in difficulty will need someone who knows where they stand legally. The AIPP can help people affected to find a lawyer and have suggested a lawyer representing a group would reduce costs. The AIPP are happy to meet concerned parties as a first point of reference before they start paying for a lawyer, and say this service would be free of charge.

If you've had problems with Bulgarian Dreams or require more information about buying property abroad contact the AIPP on +44 (0)20 7409 7061.

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Top Five Properties on OverseasCafe.com

With the proven love of 'Top Lists' in our past blogs we've decided to return to the format, outlining the five most popular properties on the website over the past month.

1. The top most accessed property on the site over the past month isn't in fact a property at all, it's a Swedish syndicate. It is telling in these difficult times that people are looking for very stable areas suffering as little as possible from the current economic downturn. Sweden checks all the boxes at the moment. You'll find this property listing here.

2. Second up is also a Swedish listing, except this one is a monster 6 bed timber house for the princely sum of just €54k. You can see the attraction really. You can find the details here.

3. For number 3 we're moving off to Spain's Costa Blanca. Casa Maribel is a three bed property between Javea and Denia for €330k. You'll find further info on it here.

4. In fourth place you'll find our first privately owned property which featured in the January newsletter. Located in the Apollonia Beach complex in Sozopol, Bulgaria, this two bed apartment will set you back €107k. If you're interested there is more information here.

5. Last, but not least, at number five we find a fine holiday villa in Davenport, Florida. The price for this three bed, two bath property has been dropped considerably to €160k. You'll find full details on the property here.

It is interesting to note that all of the most popular properties have featured either on our homepage (as Premium Properties) or on our monthly newsletter. If you would like your property to feature so it is exposed to more traffic then give Tara a call, you'll find her contact details over there on the right hand side of the page.

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UK Bargains in Sunday Business Post

It was good to see the OverseasCafe get a meritorious mention in Sunday's Business Post. Group MD, Eilis FitzGerald, was quoted on the virtual explosion in queries to the site for repossessed or 'value for money' properties in the UK since the start of the year. Extraordinary when you consider the financial environment in which we currently find ourselves.

Here's the text:

'According to Eilis FitzGerald, of Irish property portal OverseasCafe.com, the site was receiving considerable traffic from people looking for information on the British market. She said there had been more than 50 solid enquiries for information on repossessed British property listings since the beginning of January.

‘‘Investors are looking hard for deals, with most people only considering property that is being sold for at least 40 to 60 per cent be low peak market values,” she said. ‘‘Those investors remaining in the market are seasoned campaigners who avidly hunt bargains and haggle mercilessly, so this environment suits them perfectly.”'

If you are interested in current bargains to be found in the UK property market you'll find an article on it here and you can apply for further information on listings here.

You'll find the full Sunday Business Post article, "Bargains Emerging in Britian", here.

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