EC Harris has launched a debt recovery service for investors in schemes that run into financial difficulties as a result of the credit crunch.

The service is aimed at the main clearing banks, secondary and merchant banks, insurance and pension funds, as well as investment decision makers, such as solicitors and accountants.

The idea is that EC Harris parachutes in and helps investors by one of three routes:

  • Repackaging and selling the project
  • Completing the project and selling it
  • Selling it to a distressed debt fund.

The firm said the crunch would lead to a 25% increase in non-top tier developments 鈥渄efaulting to the extent that the banks will have to step in to recover their debt鈥�.

Matthew Cutts, global head of lenders and investors for EC Harris, said: 鈥淭he service will provide clients with a more diverse and sustainable offering in markets exposed to property-lending banks that may be experiencing defaults.鈥�

The service will be run by Martin Cannon, a partner at EC Harris.

Davis Langdon is also beefing up its construction business unit recovery service in response to the credit crunch.

The unit is run by partner JM Erasmus.

He said: 鈥淲e are working on a few projects which we are trying to prevent heading into insolvency.鈥�