A prominent West Country developer has strongly refuted claims of using accounting maneuvers to evade paying creditors involved with a housing project in Bruton. Acorn Property Group, in partnership with Landhouse Development Ltd., obtained planning permission in March 2017 from South Somerset District Council to build up to 68 homes at A359 Cuckoo Hill on the outskirts of Bruton.
The Cubis Bruton development, also known as Longcroft, has encountered several significant hurdles. Acorn had to intervene when the original contractor, WRW Construction Ltd., entered administration in July 2021. Facing a substantial loss of £4.6 million on the site, Acorn was accused by Landhouse of “phoenixing” — transferring assets between company entities to sidestep creditor claims.
Acorn has emphatically denied these accusations, asserting it will fully absorb the financial loss and is committed to completing the remaining homes on the site, as well as another development nearby. The initial phase of Cubis Bruton was managed through a special purpose vehicle (SPV), a legal entity created to isolate project-specific risk.
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The phase one SPV, Acorn (Bruton), entered administration in January 2024 with debts amounting to £4.6 million. Subsequently, the assets for the remaining three phases were moved to a new SPV named Acorn (Bruton) 2.
Landhouse argues this asset transfer constituted “phoenixing” intended to avoid a profit-sharing agreement between the two companies. They have initiated early-stage legal action, claiming Acorn sought to maximize profits on later phases without compensating Landhouse.
Robin Squire, Acorn’s regional managing director, “strenuously denied” the allegations, emphasizing that SPVs are standard industry practice for managing housing developments. He reiterated that Acorn anticipates losses across all phases of the project, beyond the initial £4.6 million setback.
Squire explained, “Phase one is in administration, with verified audited losses of £4.6m. All creditors and contractors have been paid in full; the only matter in dispute is Landhouse’s claim. Since phase one yielded no profit, no share payment is due.”
He further expressed frustration at Landhouse declining his offer to review the financial accounts together at their Bristol office. He insisted, “Acorn does not engage in ‘phoenixing’ to dodge creditors. Company restructures occur regularly for valid reasons with legal and financial oversight.”
Squire highlighted the severe challenges impacting the development, including WRW Construction’s insolvency—leaving millions owed to Acorn—and the collapse of initial funding partner Urban Exposure PLC, which necessitated refinancing. These events, documented publicly, heavily influenced initial losses.
Adding to these difficulties was a trio of major external shocks: Brexit, causing construction inflation; the COVID-19 pandemic, creating global material shortages; and rising interest rates, which sharply increased financing costs. “Our funding is linked to a tracker mortgage, meaning costs have surged,” Squire noted, explaining delays and losses.
Despite tempting options to abandon the project, Acorn remains determined to see it through. Additionally, in November 2024, Acorn obtained council approval for a new 60-home development near Bruton railway station on Brewham Road, which would be managed under a separate SPV in line with typical industry practice.
Squire affirmed, “Though I cannot disclose full details, any new development would operate within its own SPV, consistent with standard procedures for small and medium developers.”