Lawrence Kenwright’s hotel holding company collapsed in April owing more than £100m, according to a report by administrator Duff & Phelps, which is bracing itself for a protracted process due to the company’s “complex” set-up.
The company, which is part of the wider Signature Living Group, a residential and hospitality property investor, owes a combined £65m to other group entities including Signature Living Residential and Signature Victoria Mill, as well as an additional £28m associated with the group, the report shows.
A further £10m is owed to retail investors that bought rooms in Signature’s hotels – which include the Shankly in Liverpool, among others – expecting a 15% return on investment. However, the final figure is expected to be much higher, according to the administrator.
Other external creditors are owed £6.5m and £300,000 is owed in tax. £2.2m listed as “accruals and deferred income” is also outstanding.
The group’s business model involves setting up special purpose vehicles to acquire disused or dilapidated properties and bring them back into use as residential units or hotels, according to the report.
The units are typically sold prior to development to investors that fund the schemes, with fixed returns.
Administrators were appointed to Signature Living Hotels in April after one of the Shankly creditors sought to protect his interest and failed to uphold contractual obligations.
As a result, Henslow Trading – “a guarantor to a significant number of the group’s liabilities”, according to the report – exercised its statutory right to appoint administrators to both to Signature Living Hotels, the freeholder, and Signature Shankly, the leaseholder.
The firms’ collapses followed the earlier administration of some of the individual hotel SPVs in the preceding weeks.
Duff & Phelps expects the administration proceedings for Signature Living Hotels to take longer than 12 months.
The group is made up of 60 companies, six of which are in administration, with Signature Living Hotels being the largest of those six.
The administrator said it is “not in a position to provide an update on the company’s assets”, but anticipates that the company will be dissolved as a result of the proceedings.