Making Employees Redundant To Save Your Business
Making Employees Redundant To Save Your BusinessSpaghetti House Enters Administration With All Restaurants Closed
Published on : 14th May, 2026
Spaghetti House, one of London’s longest-running family-owned Italian restaurant chains, has entered administration, bringing 70 years of trading to an end.
Lavval Restaurants Limited, which traded as Spaghetti House, was placed into administration on 6 May 2026. Asher Miller and Stephen Katz of BTG Begbies Traynor were appointed as joint administrators. The administration notice lists the business as licensed restaurants trading under the Spaghetti House name.
All remaining restaurants have now closed with immediate effect. The closures include sites at Marble Arch, Carnaby Street, Oxford Street, Kensington High Street and Cranbourn Street. The original Goodge Street restaurant, where the business began in 1955, had already closed last year.
A statement on the Spaghetti House website said:
“We’re sorry all our restaurants are now closed.
We would like to express our deepest gratitude to our loyal customers, partners and team members, past and present, for your support over the years.
From our family to yours, Grazie.”
The business was founded by Simone Lavarini and Lorenzo Fraquelli in 1955, with the first restaurant opening on Goodge Street in Fitzrovia. Over the decades, Spaghetti House became a familiar part of London’s casual dining scene, operating multiple restaurants across the capital.
Luigi Lavarini, executive chairman and chief executive of Lavval Restaurants Limited, said the decision had been taken “with a heavy heart” after years of difficult trading conditions. He cited rising costs linked to the pandemic, Brexit, government budgets and wider global instability as factors affecting the hospitality sector.
BTG Begbies Traynor said the company had been affected by challenging market conditions, including rising operational, employment, energy and tax costs. The administrators will now oversee the wind down of the company, realise assets, assist former employees with claims and report to creditors in line with their statutory duties.
The closure is another example of the pressure facing hospitality businesses, particularly those operating from city-centre sites with high rents, wage costs, energy bills and reduced consumer spending. Even well-established brands with long trading histories can become vulnerable where customer numbers fail to recover sufficiently and fixed costs continue to rise.
For Spaghetti House, the administration has resulted in the immediate closure of all restaurants, ending a business that had been part of London’s restaurant landscape for seven decades.
Readers Guide To the Administration Process
As Spagetti House enters insolvency stakeholders often face significant uncertainty. Here is a breakdown of the legal framework and what it means for those affected.
1. What is a “Basic” Administration?
Administration is a powerful statutory process governed by the Insolvency Act 1986. It is triggered when a company is insolvent and can no longer meet its debts. An independent Licensed Insolvency Practitioner (IP) is appointed to take control from the directors. A key feature is the statutory moratorium—a legal “shield” that instantly stops all legal actions, such as winding-up petitions or bailiff visits, providing the “breathing space” needed to rescue the business or achieve a better result for creditors than immediate closure.
2. Who Gets Paid First?
The law dictates a strict hierarchy for the distribution of funds. Fixed charge holders (typically banks with security over property) are paid first. Once the administrator’s fees are covered, preferential creditors are next; this includes employees (for specific arrears) and HMRC for taxes like VAT and PAYE. Following these are floating charge holders, and finally, unsecured creditors—which include trade suppliers and customers—who are at the back of the queue and frequently receive only a small fraction of their debt.
3. What Happens to Employees?
Entering administration does not mean all jobs are instantly lost. For the first 14 days, the administrator assesses the company’s viability and may make redundancies. If a member of staff is kept on past this 14-day window, the administrator “adopts” their contract, meaning their ongoing wages and rights become a priority expense. Those made redundant can claim for unpaid wages and notice pay via the Redundancy Payments Service if the company has insufficient assets to cover these costs.
4. What About Suppliers and Customers?
Suppliers and customers are generally unsecured creditors. Suppliers should stop granting credit under old agreements and negotiate “pro-forma” (upfront) terms for any new supply to the administrator. For customers, deposits and gift cards are rarely honoured. However, those who paid over £100 via credit card may be protected under Section 75 of the Consumer Credit Act and should contact their bank immediately to initiate a claim.
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