The main company run by the man behind the Exchange Hotel in Cardiff has collapsed into administration owing £113m to creditors.
Signature Living Hotel Limited is the parent company of an extended network of 60 hotels, residential developments and other ventures including the Coal Exchange, and fell into administration on April 21.
Signature Living Hotel Limited was the sole shareholder in Signature Living Coal Exchange Limited until March 20, 2020.
According to Companies House information, the shareholdings in the Coal Exchange were transferred to a new company called UK Accommodation Group Limited on this date.
Companies House shows that shareholdings in the Coal Exchange were transferred back to Signature Living Hotel Limited in May.
Signature Living Coal Exchange Limited, the company behind the hotel at the Coal Exchange building in Cardiff, went into the hands of administrators of financial firm Wilson Field Ltd on May 12, according to the London Gazette’s official public records.
A new report published by Duff & Phelps, who are acting as administrators for Signature Living Hotel, has laid bare the scale of the problems at the company, which now has at least six other companies in administration.
The administrators have estimated that creditors are owed a total of £113,331,594. Furthermore, their report also reveals that Lawrence Kenwright recently created a new legal entity and transferred all Signature group shares to it – before being told to transfer them back by the administrators, which he did.
Matthew Ingram and Michael Lennon, of Duff & Phelps, believe that a going concern sale of the company is now unlikely as there are “insufficient funds and assets available to enable the company to be rescued”.
The report adds: “Despite the Group’s significant property interests, the level of secured and unsecured indebtedness to which the Company is directly and indirectly liable for significantly outweighs the initial expectations of the value of the Company’s direct and indirect assets.”
The administrators anticipate that “the Company will be dissolved once all outstanding matters of the administration have been dealt with”.
Earlier this year, Cardiff Council offered Signature Living a £2 million loan to help them finish the delayed development, although this money was never paid to the company. Meanwhile, the company that operates the Exchange Hotel in the building is still operating.
Cllr McGarry said: “I wanted to ask for clarity on who actually owns the Coal Exchange and whether the council risks losing any money because of the company going into administration.”
Cllr Russell Goodway, cabinet member for investment and development, said: “The company having gone into administration creates a fairly sensitive situation, where we need to respect commercial confidentiality in order to protect the interests of the many parties which have an interest in that business.
“The council is working closely with the administrators and other secured creditors, and the council is itself a secured creditor, to understand the administrators plans.”
WalesOnline has reported for some time the complaints from people who have invested in Signature schemes with the promise of significant returns – with many telling us they have not been paid back.
The administration report states: “Historically the company has been subject to various creditor enforcement actions for non-payment of amounts owed and demanded. These actions have previously been settled to the conclusion of the enforcement proceedings.”
The report states: “At present, it is too early to provide creditors with anticipated dividend prospects. A further update will be provided in the next report to creditors.”
The first of the Signature Living groups to fall into administration was the Shankly Hotel in Liverpool, which collapsed on April 16, just weeks after the nationwide lockdown was announced.
This has been followed by the individual companies covering hotels like 30 James Street in Liverpool, the Coal Exchange in Cardiff and Belfast’s George Best Hotel as well as residential developments like 60 Old Hall Street in Liverpool.
These assets are now being handled by a range of different administrators.