Skelwith Leisure hit with £70m claims after failed bit to transform Flaxby Golf Course

Aerial view of Flaxby
Aerial view of Flaxby

The firm behind a failed bid to transform Flaxby Golf Course into an entirely new town is facing almost £70m in claims from its creditors.

Skelwith Leisure, a subsidiary of luxury development firm Skelwith Group, put forward plans in 2014 to develop 2,500 homes on the site.

However, in July 2015, less than a month after it started this application, a company spokesman confirmed that Skelwith Leisure had gone into liquidation due to the costs of a legal dispute.

Liquidators arranged the sale of the property to a new company, Flaxby Park Limited, who have put plans for a new village on the site back on course.

The sale to Flaxby Park Limited included an upfront sum of £10m, VAT of £2m and a land-sale overage linked to any outcome of development on the site.

However, a report produced by RSM last week has shown that there are still unsecured debts amounting to almost £70m after the sale has been completed.

Of that sum, a total of £51.5 relates to claims by the HM Revenue & Customs, including £20.7m for VAT, £1.5m for interest and £29.3m for penalties.

The Armstrong family sold Flaxby Golf Course to Skelwith Leisure in 2008 for £7m after it proposed to take the facility “upmarket” with plans for a 300-bed five-star hotel.

It attracted a large number of investors including former England cricket captain Michael Vaughan and land registry documents showed that 158 hotel rooms were sold off plan.

However, in November 2014 Skelwith Leisure abandoned this idea and announced plans to build a new village of up to 2,500 homes complete with a primary school, shops and a smaller hotel.

Despite the hotel never being built, around 230 Skelwith Leisure customers in total paid for off-plan rooms at the scheme and received claims of £3.5m.

However, another claim of £12.5m has also been made by Zurich in respect of monies paid out by the insurance company under a policy securing the room buyers’ deposit payments.