'Golden boys' see business dreams crash
Published 10/01/2010 | 05:00
The Stokes brothers may have been the 'golden boys' of the Dublin jet-set but their business interests are in freefall. Their upmarket club, Residence, at 41 St Stephen's Green in Dublin, was able to lend €616,709 to "entities associated with its directors" while at the same time leaving the Revenue Commissioners with a €1.2m shortfall.
Now Johnny Ronan, the Dublin developer and well-known patron of Residence, who along with his partner Richard Barrett owns the Georgian building which it occupies, and the Revenue Commissioners will be pivotal in deciding the future of the Stokes twins and their high-profile business venture.
But Missford Ltd, the company which runs Residence and now has court protection from its creditors, is not their only business in trouble.
Their Mayfair Properties company, which runs Bang Cafe, has called a creditors' meeting for the Harcourt Hotel at 9am on Monday, January 18, to seek the appointment of a liquidator.
Meanwhile, the figures back at Residence just don't seem to be stacking up.
Mr Ronan and Mr Barrett, who run Treasury Holdings, bought the building for €4.75m through a company called Hartsley CMBS (Propco) Ltd. In 2008 it was re-valued down, with 10 per cent shaved off the value of the landmark property.
Residence, which was established as a club for the young and wealthy, has been badly hit by massive start-up costs and the economic down-turn. The fancy drinking den has been the late night haunt of celebrities, lap-dancing club owners, rock stars who pay large membership fees, which are currently €948 for twelve months, and a host of non-members who creep in because they know somebody's name.
Residence has, say its owners, "incurred significant capital expenditure on leasehold interest", spending €2.3m fitting out the premises, with an additional €300,000 a year in rent. In its first couple of years it has lost an additional €800,000, according to company documents.
At the same time it has lent €616,709 to "entities associated with the directors", who are the 34-year-old twins Simon Stokes, of Sycamore Road, Mount Merrion, Dublin, and Christian Stokes, of Mount Merrion Avenue, Blackrock, Dublin. Their father, Jeff Stokes, who runs the Unicorn Restaurant, resigned as a director of Residence last September.
Residence, says a statement of its affairs, is having "severe liquidity problems", owing €1.2m to the Revenue Commissioners and a further €743,533 to trade creditors, including food and drink suppliers as well as others whose services are required to run the club.
The whole venture has been funded by Zurich Bank, based in the International Financial Services Centre (IFSC). In return for putting up the cash, the Stokes twins gave personal guarantees to the bank -- including their life insurance policies.
But it was only after the Revenue Commissioners got an "attachment order" on the company bank accounts that the Stokes brothers' spending spree came to a sudden and dramatic halt.
In the High Court in Dublin last Tuesday the company pleaded for and was granted an Examinership period to allow it to continue to trade.
Company documents say it is not possible for Residence to trade while the Revenue Commissioners control their bank accounts. They also say that detailed discussions took place between the directors and the financial management team during November and December to try to salvage the business.
They are also discussing the future with legal advisers to the company and Donal McKevitt of BCM Hanby Wallace.
The big question now seems to be can Residence survive? And should it not, where will all those hip and trendy people spend their late nights from now on?