Lender got tough with Bredbury Hall before insolvency

AN aggressive stance by one of the world’s leading private investment firms helped to push Bredbury Hall into insolvency earlier in the year.

A creditors report into the administration of the 150-bed hotel and nightclub in Stockport shows that the business was profitable at an operating level but was being held back by debt repayments.

In December these debts, worth £11.2m, were then sold by Lloyds to Promontoria Holding 87 BV, a Holland-based division of Cerberus Global Investors.

It immediately cut credit to the business, reducing the overdraft facility from £500,000 to £266,767 and saying it would be withdrawn on March 20. Attempts to line up credit with other lenders failed and the directors decided to appoint administrators. When Promontoria Holding found out, it appointed its own administrators from Duff & Phelps in Manchester.

During the year to April 30, 2013 interest payments of nearly £1m pushed the business to a pre-tax loss of £543,893 on a turnover of £5.3m.

The administrators have continued to trade the venue which was valued at £13.7m two years ago. They expect to realise assets worth around £9m, leaving Promontoria with a £2.3m shortfall. Unsecured creditors are owed £3.2m and are not expected to see a return.

Bredbury Hall’s major shareholders included Stephen Finch and David Schofield.

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