The costly refurbishment of the hotel – and its relaunch – has contributed to the hotel’s insolvent state and that of the wider Richardson Hotel Group.
Here, we’ll explore what happened to the Grosvenor and what might lie in store for the future of this group.
The Grosvenor Hotel is a three-star hotel in Torquay. It’s one of the main hotels on Belgrave Road or ‘golden mile’ and has 46 bedrooms.
It is part of the Richardson Hotel Group’s portfolio along with five other hotels across Devon and Cornwall.
Keith Richardson is the sole owner of the hotel. He bought it from the comedian and entertainer Mark Jenkins in 2012. It cost less than £1m but is still trying to shake the bad reputation it gained during Jenkins’ ownership.
Jenkins and the Grosvenor Hotel found fame in Channel 4’s ‘The Hotel’ – a reality show that “followed the exploits of hapless hotelier-turned-events manager Mark Jenkins”. It ran from 2012–2015 and did not seem to benefit the hotel’s reputation.
It’s now called the John Burton-Race Restaurant with Rooms. The name comes from the hotel’s Michelin-starred chef who controls the restaurant. He is not the owner, but he may boost the hotel’s reputation.
Estimates claim the refurbishment cost over £750,000 and includes:
The Richardson Hotel Group went into administration in early January 2018. The five other hotels in the group fell into administration at a similar time.
The Grosvenor Hotel is the sixth and final hotel in the group to fall into administration.
The administrators for all six hotels are Mark Boughey and Matthew Wild of RSM Restructuring Advisory. All the hotels in the group are still trading.
Administrators are discussing sales strategies with Colliers International and may end up selling one or more of the other hotels to finance the continuation of the Grosvenor.
Too much money went into the refurbishment, rebrand and relaunch of the hotel. This is why the Grosvenor Hotel and the rest of its group fell into administration.
HMRC petitioned the Grosvenor Hotel to wind up the business. But the move to administration has halted these proceedings.
However, it’s “business as usual” according to Burton-Race.
“This is just a glitch, which will be sorted, I’m not worried. The company has plenty of assets and once one of them is sold, things will go back to normal.”
Hopefully, the move into administration will help the Grosvenor Hotel restructure and become viable once more. If not, its liquidation could affect all the Richardson hotels in the area.
As Grosvenor Hotel enters formal insolvency, stakeholders often face significant uncertainty. Here is a breakdown of the legal framework and what it means for those affected.
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.
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.
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.
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.
Written ByRobert Moore
Marketing Manager
Rob has over two decades of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.
Rob is now working with the Board at RMT to develop strategic marketing programmes to support the business plan and drive more company rescues.
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