Administrative Receiverships - Case Study


Company's Circumstance

The company had raised finance through a secondary lender to acquire an old country residence plus stable block and fund the cost of the refurbishment. The intention was to redevelop the hotel for an exclusive market. The cost of the refurbishment materially exceeded the budget and within 6 months of the hotel opening its doors to the public, cash flow problems were so severe that continued trading was not feasible.

The secondary bank instructed the practice to investigate the company and the hotel's viability. We concluded that the hotel could trade positively with a reduction in staff numbers, additional controls on expenditure and stock control and a targeted marketing plan. The bank was prepared to support the trading in the short term but required repayment of the capital sums advanced. This meant that a sale of the hotel was necessary.


The bank appointed an Administrative Receiver and steps were taken immediately to rationalise and control expenditure. Specialist agents were appointed to market the hotel as a going concern.

Much of the existing team needed to be replaced and so a ‘hands on approach' was adopted by the Receiver's team. New staff were recruited, controls introduced to ensure that the quality of service was maintained, and as a result of various promotions, the hotel's occupancy was increased.

A sale of the hotel as a going concern was achieved within 6 months of the Receiver's appointment which resulted in the secured lender recovering their lending in full.


The Next Step

The options for a financially distressed business need to be very carefully considered. Simply forward your details on our Contact Form and we will contact you. Alternatively ring us on our FREEPHONE ADVICE LINE 0800 781 0990.

There is  free debt help and advice available through a variety of debt charities. For more information, we recommend you visit Alternatively if you are a business owner, self-employed or in a partnership, we recommend you visit

All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to advise and administer the most appropriate action - all fees will be outlined during your consultation. Retained payment may place you further into arrears. You have the right to a cooling off period of 14 days. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case over the medium to long term.
Calls to our free phone number from mobile phones and other networks may be charged.

The Business Debt Advisor is a trading style of The Debt Advisor Ltd.

The Debt Advisor is regulated and authorised by the Financial Conduct Authority Reg No : 606669