Administrators of Signature Living’s Shankly hotel will investigate how investors' money has been spent

Administrators of Signature Living’s Shankly hotel in Liverpool have confirmed that part of their role will be to investigate how investors’ money has been spent by the company.

Duff & Phelps were appointed administrators of the 83-bedroom hotel on 9 April.

Mike Lennon of Duff & Phelps said: “We are aware that a number of the bedroom investors have become concerned in recent months that monies due to them have not been paid despite assurances from the company. The company is part of a wider group of companies and understanding how funds flow around the group will be central to our investigations. We have written to all known investors and will continue to communicate with them as the impact of our appointment on their position becomes clearer.”

The joint administrators have also confirmed that there will be no ‘fire sale’ of the hotel.

Lennon added: “The hotel itself is a quality venue and working with the lenders and investors we will be carefully considering our strategy to ensure that we get the best outcome for those that are owed money. All options are under consideration to recover value for the creditors.”

Henslow Trading, a lender to the group, confirmed support for the strategy.

A spokesman said: “The concept of the hotel and others within the group is unique and we believe that this will, ultimately, deliver value for creditors. We have supported certain assets in the group with a sensible level of lending against those developments, but more recently have become concerned that hotel closures and construction slow downs as a result of Covid-19, combined with increasing creditor enforcement actions, indicated all was not well financially. Despite our continued financial support on key developments, legal proceedings that had commenced against the company resulted in the administration being unavoidable.”

It is understood that an application had been made by a creditor to appoint an administrator from a different firm over the company and that the directors were also considering another administrator of their own choosing.

Henslow Trading confirmed that they had stepped in to take control of the process as they are legally entitled to do, adding: “This is a complex situation, with considerable sums of money involved across many connected legal entities. We remain highly confident that handled appropriately, there will be equity in assets and the completion of sites under development will benefit creditors through enhanced realisations. We will support this process, but it is important that the firm handling the administration is independent, reputable and able to demonstrate the depth, experience and skill base to investigate these issues, as well as protecting the assets for the benefit of all creditors.”

Last year Signature Living announced plans to sell the hotel for £40m. The group later said it intended to sell or refinance many of its properties following reports of investors’ concerns over repayments.

A spokesperson for the group at the time said that, due to Brexit, it had seen a slowdown in sales and funding, coupled with planning issues.

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