Category Archives: Business Recovery Finance Case Studies

Hotel Business Recovery Aberdeenshire

The Objective

The owners were referred to Stewart Hindley & Partners as hospitality business recovery specialists by a leading commercial property agency in Edinburgh. They were under considerable pressure from HMRC’s Late Stage Debt Resolution Collection office to make a full and immediate payment of some £400,000 in respect of their arrears, or face legal recovery action in the Sheriffs Court (with the prospect of having their assets seized to settle the debt). The owners were unable to make the payment so called in Stewart Hindley to manage their business recovery.

The Solution

The Stewart Hindley team immediately undertook:

  • a Creditors Voluntary Liquidation process to halt any further action by HMRC
  • a financial restructure of their hotel business, under a new operating entity

The Result

The owners were then able to continue trading under a new structure affording them a fresh start, without the inherent, historic debt burden.

Comments

“Our professional advisors thought that our situation was unrecoverable and were unable to help. So we had nobody to turn to and faced the prospect of having to sell our hotel, which was also our our home which was part of the bank’s security.

“Stewart Hindley LLP where recommend to us as they have a track record in hotel business recovery. Without obligation we discussed our circumstances and within 48 hours they had come up with a business recovery strategy which enabled us both to secure the freehold of our hotel, release the security held by the bank over our home and to trade without any loss of business continuity. We owe them a debt of gratitude.”

If you would like to know more about our hotel business recovery services, please email us for further information.

Hotel Business Recovery – Berkshire Country Inn

The Objective

To assess their situation with a view to undertaking this hotel business recovery.

The Solution

As commercial property finance experts, Stewart Hindley & Partners immediately undertook:

  • a business review, which identified the reasons for the decline in trade and the corresponding loan arrears
  • to present these findings, together with a business recovery plan, to the lender. However, because they were more than 3 months in arrears, the lender regrettably declined to suspend the summons despite a loan repayment schedule based on a secondary debt.

At this stage, the Stewart Hindley team was able to step in to represent their clients in the County Court and had the action suspended.

The Results

  • The hoteliers were able to recover their trading position and to repay their arrears over a period of 12 months.
  • Stewart Hindley & Partners then successfully renegotiated the terms of the client’s hotel loan on a fixed rate basis over a longer term. This ensured the certainty of debt repayments going forward.

Client Comments

“We were constantly managing our cash flow and trying to find ways to repay our mortgage arrears which resulted in a loss of focus on the revenue required to meet our commitments. We had in effect buried our “heads in the sand” when it came to the mortgage arrears.

“It became apparent after meeting with Stewart Hindley & Partners that we were not alone in this situation as they had acted for clients in similar circumstances and had achieved a positive outcome which gave us confidence from the moment we met with them.

“They recovered our business, provided additional secondary debt and importantly dealt with the lender with whom we now have a good and positive working relationship without the costly need for hotel refinancing”.

If you would like to know more about our hotel business recovery services, please email us for further information.

Hotel Business Recovery Perth & Kinross

These clients had been experiencing difficulties with the payment of VAT and PAYE due to a decline in trading and a slump drop in visitor numbers to the locality. Our clients were also under pressure from their bankers as they were in breach of their debt service covenants and as a consequence were at risk that their bank would call in their loan.

The Objective

Hospitality Business Recovery specialist, Stewart Hindley LLP, was approached to liaise with HMRC with the aim of agreeing a realistic debt repayment structure based on their ability to pay down debt over an agreed period of time.

The Business Recovery Solution

Stewart Hindley assigned a Senior Partner to take direct responsibility for liaising and negotiating with HMRC to reach a consensual agreement to meet the VAT and PAYE arrears.

During this process Stewart Hindley also liaised and worked with their client’s bank on a financial restructuring solution to support their hospitality business and debt to ensure that they could meet the historic debt.

The Result

Moving forward, the business was able to meet its current and future obligations to the bank and other creditors and improve its revenue and cash flow.

Comments

“Our previous accountants had no real understanding of our trade and had failed to advise us of an appropriate trading structure should we be unable to meet our liabilities. As a consequence we almost lost our business and our home due to debt collection measures from HMRC.

Stewart Hindley resolved our situation within a matter of weeks. Without their support we would have lost everything!”.

Hotel Business Recovery – Devon Country Inn

These “new to trade” owner operators had regrettably encountered poor trading conditions since they acquired their Country Inn some 18 months previously.

The Objective

The hoteliers made contact with us via our web site as they were encountering difficulties meeting their monthly mortgage repayments and their lender was unable to grant them any further flexibility and were in the process of calling in their loan. A hotel business recovery plan was required to provide a hotel insolvency solution.

The Solution

After contacting and meeting with their lender, Stewart Hindley & Partners agreed to undertake, on behalf of our clients, a comprehensive business review which identified that their overheads, particularly wages, were excessive and that they were trading whilst insolvent. To resolve this situation we implemented the following:

  • an immediate reduction in wages
  • identified the need for improvement in gross margins on food and beverage
  • a web based marketing strategy to improve room revenue attainment

The Results

A full hotel business recovery. We were able to demonstrate to their lenders that our clients could continue to trade the business and meet the mortgage arrears and future payments.

Client Comments

“We were in over our heads and thought that running a Country Inn was similar to our previous care home business. While the lender was flexible there is no doubt in our minds that they would have repossessed our property if we hadn’t had the support form Stewart Hindley & Partners.

Stewart Hindley & Partners continues to offer us advice and support to ensure we don’t get into the same predicament again!”

If you would like to know more about our hotel business recovery services, please email us for further information.