Lynch Group asks lender to appoint receiver for two hotels
Published 28/01/2011 | 05:00
ACCOUNTANCY firm Grant Thornton has been appointed as receiver to the Clare Inn Hotel, Co Clare, and Breaffy House Resort in Mayo.
The receiver is understood to have been appointed by the lender to both hotels, Bank of Scotland (Ireland), after a request from Ennis-based owner Lynch Hotels.
The two hotels have a combined staff of 100 and are expected to remain open following the appointment.
A partner at Grant Thornton confirmed the appointment last night after the Lynch Group announced that a receiver was being appointed to the two hotels.
The Lynch Group operates a further five hotels, mainly in the mid West.
In a statement, Michael B Lynch said: "It is with great regret that we have had to make this decision but I am happy that in our discussions with the bank and receiver we have secured a position where the properties will remain open and continue to trade."
He said the bank's decision to pull out of Ireland had a serious impact on the hotels' ability to source working capital through the winter.
In recent years many hotels have met operating costs in the off season by accessing overdrafts.
The withdrawal of overdraft facilities as Bank of Scotland exits the Irish market has left a number of hoteliers reeling, and other banks have proved unwilling to pick up the lending slack.
Lynch Hotels emerged from an examinership in 2009 when the High Court approved a scheme that saw some creditors paid back 10c in the euro.
Michael McAteer of Grant Thornton acted as examiner.
Recent accounts for the company that owns the group show it suffered an operating loss of €4.4m in the 21 months to the end of December 2009.
The accounts show the group booked a gain of €5m on debt reduced as a result of the examinership.