Hotel developer still under active investigation into conduct as director
THE developer behind the stalled George Best Hotel project in Belfast is still under active investigation by the Department for the Economy over his conduct as director in the lead up to the company falling into administration.
It comes as a number of bedroom investors, who contributed around £4.1 million to the hotel in the Scottish Mutual Building, announced they are backing Lawrence Kenwright’s efforts to regain control of the Belfast city centre scheme.
Administrators were appointed to Bedford Hotel Ltd in April 2020 after an application by finance firm Lyell Trading, who were owed £7.2 million by the company at the time.
The company was a subsidiary of Signature Living hotel group, owned by Mr Kenwright.
The joint administrators from Duff & Phelps were recently granted a two-year extension to the administration to 2023.
In court documents they have indicated the hotel is only 70 per cent complete, with up to £1.5 million required to finish the project.
The administrators have also applied to the High Court for permission to sell the listed Scottish Mutual Building with the proceeds going to Lyell Trading as the secured creditor.
With little prospect of the 59 bedroom investors seeing a return on their investment in the George Best Hotel, most appear to have backed efforts by Lawrence Kenwright to transfer the unfinished hotel to a new legal entity through a company voluntary arrangement (CVA).
The efforts fall under the umbrella of the UK Accommodation Group, a new company controlled by a number of Signature Living investors, with Mr Kenwright as chief executive.
The company, which is chaired by Co Tyrone businessman Thomas Scullion, is involved with similar CVA proposals for other former Signature Living projects in England.
In a statement, Mr Kenwright said he had invited the bedroom investors to become part of “the George Best Hotel property company” in a bid to secure new funding to complete and open the hotel.
The statement adds that the group of investors, chaired by Co Antrim businessman Stephen Kearney, “will now oversee refinancing and development work with Lawrence Kenwright acting as their CEO”.
Joint administrators in Northern Ireland have a statutory obligation to submit a report to the Department for the Economy regarding the conduct of all directors that held office in the three years prior to the administration.
The process can result in directors being disqualified for a period of between two and 15 years.
Commenting on the status of the investigation into Bedford Hotel Ltd, a DfE spokesperson said: “The matter is still under consideration and it would be inappropriate to comment any further on an active investigation.”
A spokesperson for the joint administrators told The Irish News that while they are aware of Mr Kenwright’s discussions with investors around a potential CVA to secure the hotel asset in a new legal entity, they have not received any CVA proposals to date.
“The joint administrators are motivated to see the best possible return to all classes of creditors across all assets that are subject to administration proceedings,” said the spokesperson.
“In considering any proposals received by the investors representatives and Mr Kenwright, the joint administrators will comply with their statutory duties.
“Any proposals will need to demonstrate that they do not compromise the rights of other classes of creditors and have a realistic prospect of success.”