Renwick Haddow is Chief Executive Officer of Bar Works Inc. That’s bad news for investors

Bar Works is a US-based company apparently hoping to copy the success of WeWork in the co-working sector. But in January 2017, an article on the US property website The Real Deal, exposed the role of Renwick Haddow in Bar Works.

Bar Works told Konrad Putzier, a journalist with The Real Deal, that Haddow was just a consultant to Bar Works, and that Haddow’s role had “diminished considerably” over the past six months.

Haddow’s name doesn’t appear in company brochures or on the company’s website. But Putzier did an excellent job exposing the links between Bar Works and Haddow.

A source told Putzier that Haddow had co-signed leases on behalf of Bar Works, and that Haddow is a co-founder of Bar Works. Putzier tracked down two New York alcohol licences signed by Haddow as “principal” of Bar Works. He also found a San Francisco alcohol licence that Haddow signed as a “member” and “officer” of Bar Works.

On 24 March 2016, Jonathan Black registered the Bar Works website and gave the email address renwick(at)renwickhaddow.com.

Haddow is CEO of Bar Works

On 16 March 2017, Haddow signed a form filed with the Secretary of State for California:

Renwick Haddow signed the document as the Chief Executive Officer of Bar Works Inc.

Why should investors be concerned? Well, here’s a small selection of Haddow’s previous companies:

Capital Alternatives

Haddow was behind the Capital Alternatives network. “The network is estimated to have generated over $180 million in turnover over a period of five years,” wrote Khadija Sharife in her 2015 investigative report about Capital Alternatives in World Policy Journal.

In February 2014, the High Court in London ruled that Capital Alternatives was illegally selling collective investment schemes. In March 2015, following an appeal from some of the defendants, the Court of Appeal also ruled that these were collective investment schemes. In July 2015, the Supreme Court refused to allow any further appeals.

Haddow and his fellow defendants are due to appear in the High Court in London in July 2017. Following a pre-trial review hearing on 7 April 2017, the trial will deal with various issues, including misleading statements which the Financial Conduct Authority alleges were made to investors.

Room to Invest

Before Capital Alternatives, Haddow was a director of Room to Invest. The company sold shares in a hotel in Slovenia. Investors were “guaranteed” a minimum return of 9%. When that all went pear shaped, investors received a letter from Capital Alternatives, telling them that Room to Invest had turned out to be a poor investment. Capital Alternatives suggested transferring the investment to Agri Capital, a farming land scam in Sierra Leone.

Branded Leisure

In May 2000, Haddow became finance director of the company Branded Leisure plc. By 2008, the company had collapsed. Haddow was banned from acting as a director for eight years. The Insolvency Service’s “schedule of unfit conduct” about Haddow included the following:

• That he caused and/or allowed the company to pay £25,000 in commission in respect of shares which raised £100,000, thereby breaching sections 97 and 98 of the Companies Act 1985.
• That he caused and/or allowed the company to enter into and continue substantial building expenditure commitments with (inter alia): no proper contractual arrangements in place with either the designers or the builders; no proper costings; no proper cost control; no proper cashflow or management account information and no proper ongoing supervision.
• That he caused and/or allowed the company to make inaccurate and misleading announcements on OFEX Newstrack, in particular, as to the progress of the company’s building work, sales performance of the company, and the financial performance of the company.
• That he caused and/or allowed the company to wrongly represent to Bank of Scotland that the Company had adhered to the conditions of the Licence agreement with Hearst, when in fact it had not.
• That he caused and/or allowed the company to make false representations in a Board minute dated 7 January 2003, in particular as to the financial position and prospects of the company, which caused investors to lose £500,000 in the Catalyst EIS1 Fund.
• That he caused the Company to misrepresent to the bailiff the true ownership position as to plant and equipment at the Manchester premises.
• That he caused and/or allowed the company not to keep and/or not to preserve proper accounting records, in breach of sections 221 and/or 222 of the Companies Act 1985.

The Mirror reported that,

The idea was that it would flog health foods and beauty treatments at its “Cosmopolitan Spirit” venues, but only one ever opened and that never brought in the promised returns. Investors who bought shares lost everything and creditors will not be getting the £2 million they’re owed.

In a 2012 article about Haddow, Ceri Jones, a journalist with Money Observer, wrote that Haddow has had 70 company director or secretary appointments, “with a startlingly high failure rate”. Jones wrote that,

His less successful ventures include Capital Ideas plc, Capital Ideas Financial Planning, Charolais Investment Company, Capital Mint, Undervalued Assets, Capital Ideas Investment Management, Arc Property Nominees and Arc Fund Management.

Bar Works

REDD-Monitor has written four posts about Bar Works, Haddow’s latest venture. The first post takes a look at the Bar Works investment and a related UK-based investment, Pod Works. This post has received more than 250 comments, many from concerned investors in Bar Works.

The second post looks at Heron Global Partners, one of the companies offering investments in Bar Works.

The third post features a response from Six and Flow, the company that ran Heron Global Partners’ marketing campaign. The director of Six and Flow, Richard Wood, admitted that at least parts of the marketing campaign were “potentially misleading”.

The fourth post features an email from Franklin Kinard, Bar Works’ Managing Director, explaining that the company was “facing difficulties with its banking facilities”.

The Bar Works business model is something like this. Several companies (such as Heron Global Partners, FJP Investment, Square Yards, EC1 Investments, New World Property Investment, One Touch Property Investment) marketed investments in Bar Works.

Investors hand over US$25,000. This is ostensibly to lease a desk in one of Bar Works’ co-working offices. Investors have no security. The desk in itself is worthless. Bar Works can do whatever they like with the money. The investment is unregulated. It looks a lot like another collective investment scheme.

The Financial Conduct Authority defines a collective investment scheme as follows:

A collective investment scheme (CIS), which is sometimes referred to as a ‘pooled investment’, is a fund that several people contribute to.

The lease-holder (i.e. the investor) then enters into a sub-lease with Bar Works Inc, which promises to pay US$292 per month. Except that by April 2017, Bar Works was already making excuses.

Here’s a sample Bar Works contract:

SINGLE WORKSPACE LEASE AGREEMENT

The following Lease Agreement (“Agreement”) is effective as of             2016

BETWEEN: Bar Works, Inc., located at:
41 W 46 th Street New York New York 10036 USA
hereinafter referred to as “Landlord”

AND:                        , located at:
 
 
 
 
hereinafter referred to as the “Lease Holder”

each occasionally referred to as a “Party” and collectively referred to as the “Parties”.

WHEREAS, Landlord seeks to lease one workspace in the Landlord’s co-working space located at 41 W 46 th Street New York New York 10036 USA, workspace number           to the Lease Holder for a rent.

WHEREAS, the Lease Holder seeks to purchase a lease on one workspace, workspace number           in Landlord’s co-working space, for a rent.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Parties agree as follows:

1. Lease Granted to Lease Holder – This Agreement will grant the Lease Holder a lease for one workspace, workspace number           (the “Property”), marked in the floor plan attached to this Agreement as an exhibit (hereinafter referred to as the “Lease”).

2. Rent – The Lease Holder agrees to pay the Landlord a single rent of $25,000 for the Lease upon execution of this Agreement.

3. Term of Lease – The Lease will begin on the date both this Agreement as well as the Sub-Lease Agreement attached herein are duly executed by both Parties (the “Effective Date”) and will remain in effect for 10 years from the Effective Date.

4. Termination – The Landlord will retain the right to terminate this Lease after the second yearly anniversary from the Effective Date only upon the payment of $31,250 to the Lease Holder.

5. Utilities – The Landlord will be solely responsible for payment of all utilities associated with the Property including, but not limited to, water, electricity, gas and heating.

6. Taxes – The Landlord will be solely responsible for payment of all taxes associated with the Property.

7. Insurance – The Landlord will be solely responsible for retaining insurance on the Property including, but not limited to, general liability insurance, fire insurance, construction insurance and all other insurance required by government authorities or through any other legal agreement or relationship entered to by the Landlord with third parties.

8. Regulations Affecting Property – The Landlord will be solely responsible for maintaining the Property in a condition that satisfies all requirements imposed by government bodies and legal agreements entered to with third parties.

9. Alterations – The Landlord will retain the sole right to alter the Property in any way it sees fit, as long as the Property remains in existence as a workspace space suitable for office rental.

10. Assignment – Lease Holder agrees not to transfer, assign or sublet the Property or any part thereof without the Landlord’s approval.

11. Miscellaneous

11.1. Binding Agreement – The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
 
11.2. Governing Law – This Agreement shall be governed by and construed under the laws of the State of New York, without giving effect to conflicts of laws principles.
 
11.3. Counterparts – This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 
11.4. Titles and Subtitles – The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
 
11.5. Modification and Waiver – Any modification or waiver of any provision of this Agreement shall be effective only upon the written consent of the Parties.
 
11.6. Expenses – The Parties shall each bear its respective expenses and legal fees incurred with respect to this Agreement and the transactions contemplated herein unless otherwise agreed to by the Parties.
 
11.7. Entire Agreement. This Agreement and the Exhibits hereto constitute the full and entire understanding and agreement between the Parties.

Bar Works, Inc.

By:__________________________
Jonathan Black
It’s CEO

Investor Name:

By:__________________________
 
 

SINGLE WORKSPACE SUB-LEASE AGREEMENT

The following Sub-Lease Agreement (“Agreement”) is effective as of             2016

BETWEEN:                         , located at:
 
 
 
 
hereinafter referred to as the “Lease Holder”

AND: Bar Works, Inc., located at:
41 W 46 th Street
New York New York 10036 USA

hereinafter referred to as “Sub-Lease Holder”

each occasionally referred to as a “Party” and collectively referred to as the “Parties”.

WHEREAS, Lease Holder seeks to sub-lease one workspace in the Landlord’s co-working space located at 41 W 46 th Street New York New York 10036 USA, workspace number           to the Sub-Lease Holder for a fixed monthly rent.

WHEREAS, the Sub-Lease Holder seeks to purchase a sub-lease on one workspace, workspace number           for a fixed monthly rent.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Parties agree as follows:

12. Sub-Lease Granted to Sub-Lease Holder – This Agreement will grant the Sub-Lease Holder a lease for one workspace, workspace number the “Property”), marked in the floor plan attached to this Agreement as an exhibit (hereinafter referred to as the “Lease”).

13. Rent – The Sub-Lease Holder agrees to pay the Lease Holder a monthly rent of $292 per month, with payments beginning upon execution of this Agreement.

14. Term of Lease – The Lease will begin on the date both this Agreement as well as the Lease Agreement attached herein are duly executed by both Parties (the “Effective Date”) and will remain in effect for 10 years from the Effective Date.

15. Payment to Lease Holder At End of Term – The Sub-Lease Holder agrees to pay a one-time rent of $25,000 to the Lease Holder on the tenth annual anniversary from the Effective Date.

16. Lease Holder’s Rights to Increases in Revenue Generated by Sub-Lease Holder – Beginning on the second yearly anniversary from the Effective Date, if the Sub-Lease Holder increases the price it chooses to charge third-party tenants for use of the Property, with increases in price charged to third party tenants coming into effect every two years, the Lease Holder will be entitled to monthly payments equaling fifty percent (50%) of the amount of the increase in price charged to third-party tenants.

17. Utilities – The Sub-Lease Holder will be solely responsible for payment of all utilities associated with the Property including, but not limited to, water, electricity, gas and heating.

18. Taxes – The Sub-Lease Holder will be solely responsible for payment of all taxes associated with the Property.

19. Insurance – The Sub-Lease Holder will be solely responsible for retaining insurance on the Property including, but not limited to, general liability insurance, fire insurance, construction insurance and all other insurance required by government authorities or through any other legal agreement or relationship entered to by the Landlord with third parties.

20. Regulations Affecting Property – The Sub-Lease Holder will be solely responsible for maintaining the Property in a condition that satisfies all requirements imposed by government bodies and legal agreements entered to with third parties.

21. Alterations – The Sub-Lease Holder will retain the sole right to alter the Property in any way it sees fit, as long as the Property remains in existence as a workspace space suitable for office rental.

22.1. Binding Agreement – The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
 
22.2. Governing Law – This Agreement shall be governed by and construed under the laws of the State of New York, without giving effect to conflicts of laws principles.
 
22.3. Counterparts – This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 
22.4. Titles and Subtitles – The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
 
22.5. Modification and Waiver – Any modification or waiver of any provision of this Agreement shall be effective only upon the written consent of the Parties.
 
22.6. Expenses – The Parties shall each bear its respective expenses and legal fees incurred with respect to this Agreement and the transactions contemplated herein unless otherwise agreed to by the Parties.
 
22.7. Entire Agreement. This Agreement and the Exhibits hereto constitute the full and entire understanding and agreement between the Parties.

Investor Name:

By:__________________________

Bar Works, Inc.

By:__________________________

Jonathan Black
It’s CEO