BDO sued for £250 million for London Vase sale

14 February 2020 3 min. read
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Following the winding up of a multi-million pound construction project, BDO is being sued for allegedly failing to secure an adequate amount for the sale of the building. The sale of the Vase, which now hosts apartments worth as much as £23 million, apparently short-changed creditors, meaning BDO could face charges of up to £250 million.

Such is the architectural absurdity of London’s modern landmark skyscrapers that they are often named after everyday items in a vain attempt to make them seem less alien to passers-by. Described by The Telegraph as “household objects or something you might find at the back of the fridge”, London’s increasingly Dubai-esque skyline includes vanity projects such as the Walkie-Talkie, the Cheesegrater, the Gherkin and the Shard – each more internally decadent and externally obscene than the last.

One Blackfriars – or the Vase, as it is kindly known (Freddie Jordan of Reaction once described it as “a pregnant bulge” rather than something to keep flowers in) – is yet another building in this mould. Allegedly inspired by a Scandinavian glass vessel from the 1950s residing in the architect’s private collection, the building is also nicknamed the Boomerang due to its odd curvature, but regardless of its divisive appearance it was also expected to be a colossal cash cow for developers, who poured resources into the tower believing they would be able to charge a fortune for plush apartments in the pre-crash market.

BDO sued for £250 million for London Vase sale

However, disaster struck when the financial crisis of 2008 saw property value collapse, while a downturn in lending raised questions about the future of the development. Just one year after the project was granted planning permission, lenders at Royal Bank of Scotland appointed administrators from BDO. The move in 2010 came after a breakdown in the bank’s relationship with Russian property tycoon Sergei Polonsky, who had provided the project’s initial funding. BDO was installed to wind down the site, and subsequently sold the site for £77.4 million to UK-listed property developer Berkeley Group.

A decade later, reports from The Financial Times state that BDO is now being sued for that decision. According to court documents, BDO faces a claim for £250 million in alleged negligence, following its role as administrator to the 52-storey skyscraper on London’s South Bank. According to Adrian Hyde, a liquidator at restructuring firm CVR Global, BDO failed to obtain a valuation of the site and did not conduct a proper bidding process.

The initial sale for £77.4 million did see a banking syndicate of RBS, Allied Irish Bank and Santander UK repaid in full for around £70 million of investment in the Vase, however other creditors including Beetham and Mirax are still owed some £46 million, according to CVR’s latest liquidator’s report. Lawyers at Humphries Kerstetter representing the liquidators claim Berkeley valued the site at £232 million 18 months after it was acquired.

Following its purchase, Berkeley was granted revised planning consent in 2012 for a 50-storey tower that was very similar to the original design. The building was completed in 2018, and the tower’s luxury apartments have since been marketed for between £1 million and £23 million.