Claims firm collapses after crowdfunding £817k
A claims management company which raised £816,790 through a crowdfunding website has entered administration.
The Rebus Group, which specialises in acting for clients who had lost money in tax avoidance schemes, called in administrators on 28 January to handle its affairs.
The company had raised capital through the website CrowdCube.com and attracted 109 investors last year. The largest single investment was £135,000.
Rebus, which operated from an office (pictured) in Lincoln’s Inn Fields, London, had pitched the business as seeking to ‘bring hope to ordinary investors who were misled into buying flawed complex financial solutions’. Founder Michael Kamine stated that the company had been operating for five years and had grown annual revenue to more than £1.2m.
It is believed to be the first time a firm associated with legal services has collapsed after asking the public to invest in return for a stake in the business.
In a statement, Crowdcube said it has informed members who invested in the business via email about how to help ‘minimise’ any capital losses.
‘Whilst the failure of any business is disappointing, not all businesses will succeed,’ it said. ‘The failure rate of crowdfunded business is around 6% compared to 50-70% of businesses that fail in the early years, according to the FCA.
‘The risks of investment are clear and highlight the importance of spreading investment risk with a diversified portfolio.
‘The failure of any business is regrettable; however, investors on Crowdcube can be assured that we are committed to ensuring transparency and have rigorous due diligence processes in place, which are spearheaded by an experienced team of legal and compliance professionals.’
A year ago, Rebus said it had grown from three staff members to a headcount of 29 full-time staff. It was managing more than 1,700 claims with a total value of more than £930m.
Simon Harris, of ReSolve Partners Limited, has been appointed as administrator. The firm has not yet responded to the Gazette's questions on what will happen to investors and ongoing claims.