Wayne Rooney’s management company emerged yesterday as potentially one of the biggest corporate casualties of the Icelandic banking crisis.

Formation Group, whose other footballing clients include Richard Dunne, of Manchester City, and Jack Rodwell, of Everton, admitted that it faced a liability of up to £11.6 million after the collapse of Landsbanki, the Icelandic bank.

The liability relates to a property development on the fringes of the City of London that could also leave some of Formation’s famous clients out of pocket. They were among investors who bought £19.8 million of loan notes to fund the building of a tower above the Aldgate East Underground station comprising offices, shops and some residential accommodation. The majority of the finance for the project came from a £93 million banking facility provided by Heritable, a unit of Landsbanki.

Work on the project has been halted with only 11 of the 22 floors completed and Formation admitted yesterday that it was unlikely to be completed on time. The developer is David Kennedy, the Irish property tycoon who is Formation’s biggest single shareholder, who owns 51.4 per cent of the company.

Neil Rodford, the chief executive, said that Formation faced a maximum liability of £11.6 million, which stems from its having underwritten some of the loan notes bought by investors. He said that it would also be negatively affected if the developer proved unable to pay contractors on the project.

Mr Rodford said that Formation’s clients who had bought the loan notes had been promised a return of 10 per cent a year on their investment. However, he told The Times: “Our clients do not have any risk. They are in the strongest position because we underwrote the loan notes.” He said that Formation, based in Hale Barns, Cheshire, was in talks with Landsbanki’s administrator. Shares of Formation, which had lost two thirds of their value since April, plunged a further 3¼p to 6p after the news.

Mr Rodford said that Formation’s showbusiness clients, who include Ant and Dec (Anthony McPartlin and Declan Donnelly) and Fearne Cotton, were bracing themselves for tougher times, with neither ITV nor the BBC able to pay what they once did amid the advertising downturn and the tougher licence fee settlement.

Mr Rodford added: “It’s too early to say whether we have seen an impact so far, but we would be naive if we said we did not expect things to be different. Most of our clients read the newspapers and know what’s going on.”

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