The Kent-based sailing club is likely to go into administration as a result of expensive rent costs and a decline in memberships.
The club’s Vice Commodore, Trevor Spink, admitted the club could no longer afford to pay the landlord rent for the site (around £160,000 per year), and therefore decided to file a Notice of Intention to appoint an administrator. The number of members signing up had also fallen in recent years.
All 600 club members received news of the situation in a letter yesterday (23rd June), where Trevor Spink made clear the rent was too high to continue, having even tried to negotiate a deal with the landlord.
He stated, “Our request was for a rent-free period and to renegotiate the rent in-line with a level the Club could bear moving forward”.
“On Thursday 18th of June we received the outcome of these discussions and not only has the landlord refused any movement but in addition they have rescinded a longstanding agreement for us to pay our rent monthly. The landlord has presented us with an invoice for the next 3 months as per the terms or our original lease. This becomes payable Wednesday 24th of June making the club unable to pay its debts as they fall due”.
The landlord’s action has had the direct result of making the club technically insolvent”.
Options for the club’s future were also mentioned, with administration suggested to be the best outcome for creditors. As Spink pointed out, administration would protect the company against legal action and provide the best possible return to creditors. Once a company is insolvent, all directors have a legal duty to maximise creditors’ best interests.
Spink stated he plans to appoint an administrator immediately after the Extraordinary General Meeting (EGM) at the Laberhurst clubhouse on Sunday 28th June.
The club has requested all members to remove their boats from the site as soon as possible.
If appointed, the administrators handling the case, Whitemaund LLP, will be reviewing all the remaining options available to the club, including a possible sale of the business and its assets.