Distinguished Hotels faces new legal action

Luxury hotel marketing consortium Distinguished Hotels faces fresh legal claims for £300,000 in unpaid wages, expenses and commission fees.

William Burruss, a joint-venture partner whose formal relationship with the company is in dispute, plans to launch a £250,000 civil action to recover cash he claims the group owes him after it shut its doors on 25 April with debts of more than £1m (Caterer, 18 May, page 8).

He is demanding money for unpaid travel expenses and commission on deals he did to bring US hotels into the UK-based 110-strong global consortium.

"I was pretty much acting as an unpaid consultant. When the UK company folded it didn't have the wherewithal to pay all of its creditors," he said.

Distinguished also faces a £50,000 bill from seven former employees for unpaid wages and expenses after Watford employment tribunal served proceedings on Friday (26 May).

A court letter was sent to the group's three owners - David Owen, former chairman Tim Hadcock-Mackay and William Burruss - demanding a response within 28 days.

But a spokesman for Hadcock-Mackay thought the seven would not receive any cash because the company was likely to be wound up in June following a legal dispute with AB Hotels for an unpaid bill of £20,000.

Distinguished's London office closed after it emerged that financial director David Owen had failed to pay PAYE for five years and that the company could owe the Inland Revenue up to £700,000.

In-fighting between Owen, Hadcock-Mackay and Burruss has since clouded the picture. Burruss has distanced himself from the company by claiming he was never a shareholder. He said any share agreement was invalidated and Owen had concealed the company's true financial status from him.

Burruss is also pointing the finger at Hadcock-Mackay for not effectively overseeing the company's finances.

A spokesman for Hadcock-Mackay said he was planning legal action of his own against Owen. "The only thing Tim has been guilty of is trusting Owen."

Owen was unavailable for comment.

By Tom Bill

Get your copy of Caterer and Hotelkeeper every week -