The firm, which is currently rebuilding its website, announced the decision in its annual results report published on the  London Stock Exchange news site.

 

In the report, published on Friday afternoon, parent company, HV Group, revealed they suffered a consolidated pre-tax loss of  £37,788 which, although significantly smaller than the previous year‘s of £271,785, hasn’t deterred the company from pursuing  legal action against its former lawyers and valuers.

 

Speaking exclusively to Bridging and Commercial, managing director, Andrew Lazare, said: “We believe we have been badly let  down by our previous advisors and we have accordingly brought claims against our former lawyers who acted for us on the  conveyance aspects of the bridging loans and against a number of our panel valuers who, in our opinion, grossly overvalued  the properties which we lent against.”

 

Hilton Ventures has not yet disclosed the names of those against whom proceedings are being held and are waiting for a  specific court date – though expect it to be later this year.

 

According to the lender there are also other claims which are further progressed. Hilton Venture says that it hopes to have  these settled in the next few weeks.

 

In Friday’s report the company’s chairman, Graham Alcock, outlined clearly how both he and funders, NatWest Bank (NWB),  believe their ex-advisors should be held liable for the lender’s losses.

 

He said: “We have commenced proceedings against certain professional advisors on a number of transactions where our lawyers  have advised that such professionals did not protect the interests of either the company or our funders, NWB. These claims  are being pursued with the full support of NWB.

 

“We have retained Paul Chaisty QC to represent us on these claims.  As announced previously, we are unable to go into these  matters in detail so not to prejudice our position or claims, but nevertheless we expect to settle the outstanding matters in  the near future, without any loss to Hilton Ventures.

 

“Overall 2009 was a difficult year for the Group, which is a result of the on-going deterioration in the economy in general  and the property market specifically.”

 

However, Hilton Ventures Finance Limited, which is the group’s main trading subsidiary and bridging arm, reported a profit  growing from £47,261 to December 2008 to £224,581 to December 2009 and claims to have started lending again with plans to  “increase activity over the next few months”. 

 

This is despite Mr Alcock stating that there were “no new loans drawn down in the second half of the year [2009].”

 

Commenting on Hilton Ventures’ situation, Eugene Esterkin of bridging firm, Affirmative Finance, said: “The last year has  demonstrated that the lending industry, contrary to popular belief, is a harsh and sometimes brutal environment to do  business – as a lender or as an advisor. 

 

“Nothing replaces sheer experience with sound underwriting and if Hilton were badly advised in any instance, then this  further underlines the absolute necessity to seek out and retain the best specialist advisors in the industry, whether they  be solicitors, valuers or otherwise. 

 

“Those who have not got that experience or expertise would be well advised to keep their money in their pockets and look at  other business ventures, or alternatively acquire that experience and expertise.”

He says lenders are restricted in the amounts they have available to lend and risk aversion to borrowers with problematic  credit histories is such that any sub-prime products would be priced so highly they would not be affordable for borrowers.

Speaking to Mortgage Introducer last week he acknowledged the past importance of the sub-prime sector and its potential role  in rehabilitating consumers who are struggling financially.

But he said he did not believe the FSA would support this type of high risk lending.

He told Mortgage Introducer: “Historically we were one of the first supporters of Kensington coming in to that end of the  market because we saw the need for people to be rehabilitated. The key thing is do sub-prime lenders rehabilitate?

“Where they do, they’re clearly reaching their objectives, where they don’t, have they fallen into the trap of debt  consolidation and the customer carries on borrowing on their credit card? It doesn’t achieve for the customer the outcome the  FSA will want.

“Sub-prime which persists in putting off the evil day of paying bills is something the regulator won’t put up with."

Coogan says he realsies a large number of people do have ad hoc problems and that they should be able to get back on their  feet.

But he added: "The problem in an environment where there isn’t any funding is that they won’t get back on their feet by  borrowing until they’ve rehabilitated their finances, which means a series of clear records in terms of credit card  repayments or other types of debt before the mortgage.”

Coogan says the situation currently means lenders aren’t lending to all the first-time buyers who want a mortgage, which  consequently means lenders do not want to go down the risk curve by lending to sub-prime customers.

He said: “Even if they did, the price of that risk might deter an intermediary from recommending that product.

“In the original days of sub-prime the product prices were much higher than prime, reflecting the risk.

"But what happened in the last period before the credit crunch, was sub-prime products being priced almost at the same price  as prime. And that mistake will not be repeated because people have got the memory of the mistake and the impact.

“It’s not a positive picture for sub-prime coming back in the near future, or the next five years.

"If it comes back it will be in a very small scale, closely regulated way and if it is properly priced for risk, and bear in  mind mortgage pricing is not going to get cheaper, the price itself may just be too high for customers to bear.”

Many brokers report seeing borrowers with credit problems in their past, but consensus suggests the products available to  deal with these customers are few and far between.

Lender Aldermore recently launched a range of products dubbed “complex prime” aimed at borrowers with marginally impaired  credit, but criteria is still relatively restrictive.

Coogan added: “The simple answer is to keep your nose clean and go back to the lender when you can afford it and when you can  get a good prime rate.”