Bar Works is a New York City company that provides shared office space in former bar and restaurant premises, and offers investors the opportunity to buy and leaseback individual desks within the premises for a 10 year period at a minimum cost of $25,000. It has been noted that elements of the investment program are akin to a Ponzi scheme.
Video Bar Works
Locations
The first Bar Works venue, at 47 West 39th Street, was opened at the end of October 2015 and had 200 work units, plus meeting and networking areas. Though superficially a shared office space, the venue was dependent on the coffee bar operating inside for revenue. Following the coffee bar's decision to pull out of the space, Bar Works announced in June 2017 that the location would be shutting down due to difficulties in otherwise generating business.
The second location in Manhattan's Times Square opened for business in February 2016. The Times Square space occupied 4,500 square foot with a capacity for 300 people. It shut down in early 2017 following difficulties attracting a steady client base.
In June 2016, Bar Works announced plans to open a 6,000 sq ft co-working space at Jack's Restaurant in San Francisco after acquiring the freehold to the second oldest restaurant in the city. Following difficulties attracting business in this location, in May 2017 it was announced that the building would be converted from a co-working space into a restaurant unaffiliated with Bar Works.
Maps Bar Works
Bar Works Investment
Bar Works offers the public opportunities to buy workspaces, starting at $25,000 each, which are then leased back to Bar Works for a period of 10 years. The leaseback investment offers guaranteed returns of 14% per annum. In response to skepticism of such high guaranteed returns over such a long period of time, Bar Works hired unnamed auditors to review the company, who described the business model as "bomb-proof".
Payment problems and legal issues
In April 2017 Bar Works issued a statement to investors describing "difficulties with its banking facilities", alluding to disruptions in investment returns in the foreseeable future.
In May 2017 Bar Works issued a statement to investors informing them that their monthly lease payments would again be delayed due to "productive restructuring". CEO Franklin Kinard reached out to investors later in the month stating that he believes payments would resume after June 1. In order to reassure investors that Bar Works workspaces are operating and not empty, Kinard also described the company's efforts to provide "video feeds of the activity in our buildings", an uncommon practice in the shared workspace industry. Kinard resigned from his position and left Bar Works before the end of May 2017.
Shortly after Kinard's resignation from Bar Works, Brad Fiorilla became the face of the company, as Director of Sales. Brad was previously general manager of UFC Gym in Brighton Beach, New York.
Though monthly lease payments remained suspended into June 2017 and locations continued to shut down, Bar Works announced that available funds were being poured into the opening of two new venues during the month, in New York's Tribeca district, and Los Angeles' Hollywood. Before the end of the month, the Tribeca location's signage had been removed, and a juice bar was operating out of the space.
On June 16, 2017, 27 investors from the People's Republic of China who invested more than $3 million in the Bar Works companies filed suit in New York County Supreme Court, claiming that the companies are a Ponzi Scheme orchestrated by Renwick Haddow, who kept his controlling role in the company hidden. The Chinese investors also claimed that Bar Works defaulted almost immediately on its payment commitments and that it fraudulently solicited investments in locations that it never planned to open. On June 21, 2017 a second lawsuit was filed against the company by Plentium Capital Group Corporation in Florida Federal court, with the plaintiffs citing that $25 million of raised funds were immediately defaulted upon, and that management links to prior Ponzi schemes were hidden from marketing materials.
On June 30, 2017, the U.S. Securities and Exchange Commission filed fraud charges against Renwick Haddow, "the clandestine founder of a purported Bitcoin platform and a chain of co-working spaces located in former bars and restaurants, alleging that he bilked investors in both companies while hiding his connection given his checkered past with regulators in the U.K."
On the 25th July, Renwick Haddow was arrested attempting to enter Morocco. He is currently being held in prison awaiting extradition to the US. http://www.news24.com/Africa/News/morocco-arrests-british-bitcoin-dealer-wanted-in-us-20170727
References
Source of the article : Wikipedia
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