Since January 2017, REDD-Monitor has written a series of posts about Renwick Haddow’s latest investment scheme, Bar Works, a New York-based co-working startup company. Last week, Law360 reported that Bar Works “is now the subject of at least two lawsuits from investors who call it a multimillion-dollar Ponzi scheme”.
On 16 June 2017, a group of Chinese investors filed a complaint in New York state court. They say they invested US$3 million in Bar Works.
On 21 June 2017, the Plentium Capital Group Corporation filed a complaint in Florida federal court. In the complaint, Plentium estimates that between 250 and 1,000 investors have invested at least US$25 million in Bar Works. Plentium invested US$500,000 in Bar Works.
Both law suits accuse Bar Works of hiding the involvement of Renwick Haddow in the investment scheme. Haddow previously ran the Capital Alternatives network of scam companies. The UK Financial Conduct Authority has taken Capital Alternatives and Haddow to the High Court in London. The High Court ruled that the company was illegally running an unregulated collective investment scheme. This ruling was upheld in the Supreme Court.
In a statement about Capital Alternatives, the FCA states that,
We are now proceeding to deal with remaining aspects of the case back in the High Court, including the issue of misleading statements which we allege were made to investors in relation to these schemes.
The trial will take place in July 2017.
Haddow is Black
Someone calling themselves Jonathan Black was supposedly the CEO of Bar Works. Black signed contracts with investors in Bar Works. Black told The Real Deal website that Haddow was only a consultant.
The Real Deal’s Konrad Putzier pointed out that Jonathan Black’s LinkedIn page featured a photograph of someone else. And when Black registered the website barworks.us, he gave Haddow’s email address. Within weeks of The Real Deal publishing its article about Bar Works, Jonathan Black’s name was replaced by that of Frank Kinard on Bar Works’ company documents.
Kinard resigned as CEO of Bar Works in May 2017.
Kinard told Law360 that he has been interviewed by the FBI regarding Bar Works.
In an article on Crain’s, a New York business website, Kinard is quoted as saying that, “Black was a fake identity used by Haddow”.
In its legal complaint Plentium describes Jonathan Black as “a fictitious person created to conceal the involvement of Haddow”.
Pod Works: Bar Works in the UK
In April 2016, the Daily Mail interviewed Jonathan Black about Bar Works’ plans to launch a company called Pod Works in the UK. This harebrained scheme involved using Britain’s red phone boxes as mini-work stations. Black claimed to have bought 14 phone boxes – the first pods were supposed to open by July 2016.
Pod Works asks, “Why sit in a noisy, public coffee shop when you can sit in one of our secure Pods and truly focus on your work?”
Put another way, why stand (because there’s no chair) in a cramped phone box to do some work, rather than sitting in comfort in the nearest coffee bar?
I know which I’d prefer. Bear in mind that the photograph below is with the door open.
The Daily Mail described Black as “a former venture capital firm boss from London who moved to New York in 2013”. Black said,
“Bar Works started in October last year but I had the idea more than ten years ago.
“I ran a venture capital firm and had experience of the pub trade. I thought, ‘Wouldn’t it be great to have all these firms under one roof? Pubs in the UK have rooms upstairs, we could use those.’
“But landlords got greedy and charged higher rents, so the model didn’t work at that time.
“I came across a closed down bar in New York.
“It took a while for people to grasp the idea, but we have three now and 15 per cent of trade is from people walking past.”
Bar Works’ investment scheme falls apart
The Chinese investors’ lawsuit accuses Bar Works of running a Ponzi scheme. Bar Works paid returns to its existing investors from new investors in Bar Works, “rather than from profit earned through legitimate investments or business activities”.
The lawsuit also accuses Bar Works of selling more co-working desk spaces than existed, and accuses Bar Works sold desk spaces in locations that were never opened.
Tribeca Citizen reports that “the new Bar Works at 95 Chambers was open as of yesterday” (i.e. 26 June 2017), but notes that Bar Works is subletting space to Bulletproof Coffee, Pure Green juice bar, and Beyond the Bar fitness studio. Tribeca Citizen adds that “the co-working space downstairs is tiny”.
For his article on Crain’s about the collapse of Bar Works, journalist Daniel Geiger visited two of Bar Works’ properties in New York. He found a padlock on Bar Works’ 47 West 39th Street address and wrote that West 46th was “dark and empty”. No one at Bar Works answered his phone calls.
Alexander Brodsky, the landlord of a planned Bar Works address told Crain’s that construction work had stopped and Bar Works hadn’t paid any rent for two months. Brodsky’s firm, the Brodsky Organization, has started eviction proceedings against Bar Works.