Law firm Berg Legal is representing more than 150 of the 375 tenant creditors affected by the collapse of Didsbury-based property firm UK Housing Alliance.
UK Housing Alliance acquired property from homeowners and then rented it back to them. Sellers would receive 70% of the value of the sale, with the remaining 30% to be released as a lump sum following ten years' leaseback, provided that they paid top market rent for the full ten-year period.
UK Housing Alliance, however, entered administration with outstanding debts to its secured lender, Kaupthing Singer & Friedlander, which itself collapsed in the aftermath of the Icelandic banking crisis.
The administration means that tenants who sold their properties could be left millions of pounds out of pocket, with the tenants represented by Berg Legal alone collectively owed around £5m.
They also risk losing the homes they sold to UK Housing Alliance unless they continue to pay top market rent, with no guarantee of receiving the balance of the sale price.
Lee Dunnill, head of dispute resolution at Berg Legal, said: "UK Housing Alliance promised homeowners that their dreams could become a reality. But that dream has rapidly turned into a nightmare.
"Many of the people who dealt with ukHA were desperate to release equity while remaining in family homes where they had lived for many years. Now, even though they have met every obligation and made every monthly payment, they could find themselves homeless and will almost certainly find themselves substantially out of pocket. We will be doing everything we can on their behalf to secure the debts they are owed and to help them stay in their homes."
Dunnill is leading the team representing the creditors, alongside property litigation partner, Joy Barnett.
Berg Legal is based in an office in Peter Street in Manchester city centre.