A hotel chain run by former Plymouth Argyle chairman James Brent left debts of more than £4m after collapsing into administration - and people are unlikely to get any money back.
Suite Hospitality Ltd – which had hotels in Exeter, Windsor and Derbyshire - went into administration in June 2020 after talks with major creditors and landlords failed to find a way for the troubled chain to remain in operation.
Now, more than a year on, joint administrators at Begbies Traynor Group Plc have revealed that more than £4m is owed to creditors, but there is unlikely to be any cash to pay them.
Among those owed cash is Mr Brent’s Exeter-headquartered company Natatomisam Ltd which lent Suite Hospitality, of which he is also a director, £571,000.
Even though this loan was secured via a floating charge, a joint administrators’ report says Natatomisam is unlikely to receive any money.
Meanwhile, £4,066,878 is owed to a range of unsecured creditors and, again, joint administrators say there will be insufficient funds to pay them.
Landlords of Exeter’s Buckerell Lodge Hotel, Windsor’s Harte and Garter and Goswell House hotels and the Makeney Hall Hotel in the Peak District, find themselves owed more than £1.5m. One landlord is the Queen’s property holding corporation the Crown Estate, which is £1,113,071 short.
HMRC is owed £320,000 in VAT, and more than £380,000 in other unpaid taxes, and dozens of trade creditors are owed a combined £865,712. Of these Exeter City Council is owed more than £27,000, South West Water more than £19,000 and Exeter-based EDF Energy £10,000.
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A huge number of small companies are out of pocket too, including Exeter’s Tozers Solicitors, by £6,551, Exeter’s Gibbins Quality Meats by £2,633, and Honiton’s Otter Brewery, which is owed £1,200.
Even secured creditors are unlikely to get their money back. In addition to Natatomisam, Choice Hotels International Holding Company, which had a charge secured against the Harte and Garter Hotel, is owed £74,169.
A total of £146,593 owed to employees for wages and holiday pay is unlikely to be paid too. The Government has paid employees up to the maximum it is allowed, but any shortfall will be part of the insolvency proceedings.
The joint administrators, who have had the administration extended until mid-2022, will continue to try to realise assets. But documents filed at Companies House reveal that due to significant arrears of rent, and “significant dilapidations” in regards to the hotel properties, the leases for the hotels have “no value”.
A document said: “Initial attempts to facilitate a transfer of the leases were inconclusive, as terms could not be agreed with the landlords.”
Suite Hospitality, incorporated in 2013, initially operated five hotels and a health spa, but surrendered the lease on one hotel and the spa in 2018.
It left it with the Buckerell Lodge Hotel, on Topsham Road, Exeter; the Harte and Garter Hotel and Goswell House, both in Windsor; and the Makeney Hall Hotel , Belper, Derbyshire, all run under leases.
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Documents filed at Companies House showed the chain, of which Mr Brent was one of three directors, made losses of £137,557 and £444,613 in 2018 and 2017 respectively and had to take a loan from Mr Brent’s Natatomisam Ltd holding company.
Then, during 2019, Suite Hospitality suffered poor trading and needed money for essential repairs, taking £300,000 from its parent company and slashing costs.
A deal which saw it rent restaurant space at the Windsor hotel to the famous The Ivy chain turned sour when a £3m refurbishment faltered and it was closed for Christmas 2019.
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The Covid pandemic then struck and though Buckerell Lodge and Makeney Hall remained open for key workers, falling revenues meant deals with creditors had to be struck. But two of the four hotel landlords would not budge on proposals put before them. As trading conditions worsened directors decided the best course of action was to appoint administrators.
Buckerell Lodge is trading again as a hotel, called The Buckerell, and even taking bookings for Christmas 2021. Belper’s Makeney Hall Hotel and Windsor’s Goswell House have also reopened. Windsor’s Harte and Garter remains closed.