Lumley Castle hotel rescued from administration

The future of the four-AA-star Lumley Castle hotel in Durham has been secured after it was rescued from administration.

The castle was built in 1388 and has been the seat of the Earl of Scarborough for over 700 years.

In 1976, management was handed over to No Ordinary Hotels, which turned the property into a 73-room hotel. The castle is also a popular wedding venue and hosts themed events including a medieval banquet and has its own escape room.

Lord Scarborough said the previous structure of the business had become unsustainable despite the “best efforts” of the former tenants. He has now acquired the hotel, alongside his trustees, from joint administrators at PKF GM.

Bespoke Hotels will manage the castle under the new ownership structure.

Terms of the deal were not disclosed but the long leasehold interest in the property was marketed for £6m in 2015.

“Maintaining this wonderful hotel and the team at Lumley Castle is our priority,” said Lord Scarborough.

“Lumley Castle was our family home for many centuries and, notwithstanding the best efforts of the previous tenants, who established a successful business over the years, it became apparent that the current structure was not sustainable and, therefore, I agreed with my trustees to take the property in-hand.”

Olive Collinge of PKF GM said the “challenging transaction” would save jobs and allow the hotel to fulfil future weddings, events, and room bookings.

Lord Scarbrough and his trustees were advised by insolvency and restructuring partner Charles Boyne of Weightmans LLP.

The PKF GM team also included Elizabeth Sapsted and Kirran Gibson. Rob Smithson of Colliers advised on the sale, with Lemi McAuley, Lizzy Wood and Molly Rowell at Hill Dickinson acting for PKF GM on the transaction.

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