From ambition to liquidation: The fall of the £2.5bn London Resort project

Friday, January 24, 2025

The much-anticipated £2.5 billion London Resort project, designed to rival Disneyland and create a massive entertainment hub on the Swanscombe Peninsula, has officially been cancelled after a High Court judge ordered the company behind the project, London Resort Company Holdings (LRCH), into liquidation.

This marks the end of over a decade of setbacks, legal battles, and unmet promises that ultimately led to the project's failure. Initially proposed in 2012, the grand plans for the theme park, featuring world-class rides, hotels, restaurants, and thousands of jobs, have now come to a bitter conclusion.

Key Takeaways

The £2.5 billion London Resort project has been cancelled after a High Court judge ordered the company behind it into liquidation, marking the end of over a decade of setbacks and unmet promises.

  • The project faced numerous setbacks, including environmental concerns, legal disputes, and rising debts, which ultimately led to its failure.
  • Paramount's decision to take legal action against LRCH for breaching their contract contributed significantly to the company's financial collapse.
  • The collapse of the London Resort has left local communities in Kent uncertain about their future and has diminished the potential for economic growth in the region.

A decade of setbacks and legal struggles

The London Resort, initially envisioned as a Disneyland-like entertainment complex, faced numerous setbacks over the years, including environmental concerns, legal disputes, and rising debts. In 2021, Natural England designated the 372-acre site as a Site of Special Scientific Interest (SSSI), halting development and marking a turning point for the project.

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The company struggled to secure the necessary planning permissions. In March 2022, just before submitting its Development Consent Order (DCO) application, LRCH withdrew it, citing unresolved environmental and transport issues. Despite promises to resubmit, progress stalled.

Paramount's role in the project's demise

Another significant blow came from the project's relationship with entertainment giant Paramount. The two companies had a long-standing deal in place for Paramount to lend its intellectual property for the park, including using popular film franchises like Star Trek, Mission: Impossible and The Godfather to brand rides and attractions.

However, as LRCH failed to meet its contractual obligations, Paramount grew frustrated and decided to take legal action. In 2023, Paramount filed a lawsuit claiming LRCH owed them £14 million for breaching the terms of their agreement.

In December 2024, an insolvency judge found that LRCH had committed multiple breaches of its contract with Paramount and other creditors, which contributed to the company's financial collapse.

The company, which had already faced debts totaling £100 million, had tried to resolve the crisis by implementing a Company Voluntary Arrangement (CVA) in March 2023. However, this move was met with resistance from Paramount, and with mounting legal pressure, LRCH’s financial situation became untenable.

Uncertain future of Swanscombe Peninsula

With the decision to liquidate LRCH, the future of the Swanscombe Peninsula, where the resort was to be built, now hangs in the balance. The land, owned by Swanscombe Development LLP, was put on the market in 2024, and negotiations are ongoing regarding its future use.

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The site had been earmarked for the London Resort, with LRCH spending millions to secure an option to purchase the land. However, with the option expiring in December 2022 and no renewal in sight, the future of the site remains unclear.

Impact on local communities and Kent’s economy

The collapse of the London Resort is not only a loss for the investors and developers but also for the local communities in Kent. The project was originally expected to create thousands of jobs and bring millions of visitors to the region, boosting UK tourism. The failure of the project has left businesses on the Swanscombe Peninsula uncertain about their future, and the potential for economic growth has now diminished.

Steve Norris, former chairman of LRCH, expressed deep regret over the project's failure, calling it 'a tragedy for Kent and the UK'. Norris pointed to the UK's slow planning process as a contributing factor to the demise of the project, noting that the lack of progress over the years led to a loss of confidence among investors.

Broader implications for mega-projects in the UK

The downfall of the London Resort underscores the difficulties that future mega-projects in the UK may encounter. Even with substantial financial support and grand aspirations, it was ultimately derailed by legal, environmental, and planning challenges.

The failure underscores the importance of proper planning, solid legal agreements, and addressing environmental concerns from the start. It also raises concerns about the future of UK tourism and the country’s ability to attract large-scale international projects amid regulatory and financial challenges.