Von Essen Hotels which runs 28 luxury hotels has gone into administration. Administrators at Ernst & Young are trying to find buyers. The business reportedly had debts of £250m. Barclays and Lloyds Banking Group reportedly appointed administrators after the five-star hotel group breached a covenant regarding minimum payments of interest. Banks can appoint an administrator if they hold a qualifying floating charge under new debentures granted after 15th September 2003. If the bank holds an older debenture it can appoint an Administrative Receiver. But it should be pointed out that the administrator has a duty to act in the interests of all creditors not just on behalf of the bank/floating charge holders.
Angela Swarbrick, joint administrator at Ernst & Young, said: "It is business as normal for the hotels and customers of von Essen Hotels can continue to enjoy their stay." The hotels themselves have not gone into administration.
Von Essen Hotels employs 40 people and another 1,000 work at the 28 hotels.