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Centre Pointe Development Global Vision Investment – Are investors’ funds at risk?

UK investors are facing a period of uncertainty about the safety of capital invested with a group of companies based in Arizona, under the name of Centre Pointe Development Global Vision Investment. Investments in this company were sought to enable it to invest in “real estate” opportunities in Arizona as described at www.cpdevelopment.com. It is described on this website as,

“an end to end real estate development company. The components of our business model – design/planning, and improvement, residential construction, commercial construction, commercial refurbishment and property sales/ leasing/ management can take any development or refurbishment project from “inspiration” to final sale based purely on the strength of our in-house capabilities and strategic alliances.”

Centre Pointe offered individuals the opportunity to put their own money into its developments. Its website claims that it offers: –

Superior Risk-Adjusted Returns Through Superior Investments
CentrePointe Development seeks to generate superior risk-adjusted returns through investments in high-quality commercial and residential properties. We execute on this strategy by combining sophisticated capital market, asset management and investment expertise with the broad operating capabilities and experience of CentrePointe Development.”

Now, however, the Centre Pointe companies concerned have filed for chapter 11 bankruptcy protection. Chapter 11 is a process which protects a company which is struggling financially from being made bankrupt, whilst it tries to reorganise its affairs.

Similar Chapter 11 protection has been granted to household names such as American Airlines, Kodak and Continental, some of which have emerged stronger after financial reorganisation.

An Investors’ Committee is being formed in Arizona to put forward investors’ interests within the bankruptcy court proceedings, which will allow administrators of Centre Pointe companies to sell assets, manage the bankruptcy court process and decide whether, how, and when to make payments to investors from what funds are eventually available.

Many people in the UK were advised to invest in Centre Pointe, some by regulated Independent Financial Advisers. Many of these private individuals would not have heard of Centre Pointe had their IFAs not mentioned this to them. Some were only looking for a reasonable return, with monies being held in a safe harbour for their capital. Whilst the investment performed as expected in earlier years, in the course of 2011, Centre Pointe missed various payments due to investors and concerns grew about the reasons for this.

In making investment recommendations, IFAs in the UK need to be able to demonstrate compliance with the rules of the Financial Services Authority (FSA) relating to how such investments were suited to their clients’ needs and attitudes to risk. Strict rules also apply to the disclosure of commissions payable to financial advisors who brought about investments in Centre Pointe.

Wards Solicitors is able to offer advice to UK investors questioning the investment recommendations they were given by UK based financial advisers, to help UK investors review the suitability of investments in Centre Pointe. We have experience in making professional negligence claims against financial advisers in the UK who have been shown to have made inappropriate recommendations.

As many of these monies were invested in from 2007 onwards, UK investors need to act swiftly to establish whether they have a claim this year, because from six years after the investments were made, limitation may constitute an obstacle or complication to bringing a claim for compensation.

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