Shankly hotel administrators to investigate how investor money was spent

Duff and Phelps, the administrators appointed to Signature Living’s Signature Shankly Hotel Limited, which went into administration on 9 April 2020, has confirmed that part of its role will be to investigate how investor money has been spent by the company prior to the appointment.

The joint administrators also confirmed that there will be no “fire sale” of the Signature Shankly hotel.

They added that the hotel itself is a “quality venue” and as such they will work with the lenders and investors to “carefully consider a strategy to ensure the “best outcome” for those that are owed money.

Mike Lennon, one of the joint administrator’s said: “We are aware that a number of the bedroom investors have become concerned in recent months that monies due to them have not been paid despite assurances from the company.

“The company is part of a wider group of companies and understanding how funds flow around the group will be central to our investigations. We have written to all known investors and will continue to communicate with them as the impact of our appointment on their position becomes clearer.”

Henslow Trading, a lender to the group, confirmed support for the administrators strategy. A spokesman said: “The concept of the hotel and others within the group is unique and we believe that this will, ultimately, deliver value for creditors.

“We have supported certain assets in the group with a sensible level of lending against those developments, but more recently have become concerned that hotel closures and construction slow downs as a result of Covid-19, combined with increasing creditor enforcement actions, indicated all was not well financially.”

They added: “Despite our continued financial support on key developments, legal proceedings that had commenced against the company resulted in the administration being unavoidable.”

Duff and Phelps also revealed that It is understood that an application had been made by a creditor to appoint an administrator from a different firm over the company and that the directors were also considering another administrator of their own choosing.

Henslow Trading confirmed that they had stepped in to take control of the process “as they are legally entitled to do”.

They added: “This is a complex situation, with considerable sums of money involved across many connected legal entities. We remain highly confident that handled appropriately, there will be equity in assets and the completion of sites under development will benefit creditors through enhanced realisations.

“We will support this process, but it is important that the firm handling the administration is independent, reputable and able to demonstrate the depth, experience and skill base to investigate these issues, as well as protecting the assets for the benefit of all creditors.”