Park Hall Hotel’s £1m debt and no assets at start of liquidation
The company behind an iconic Lancashire hotel which closed after a failed attempt to convert it into asylum accommodation is disappearing with debts of nearly £1million.
Park Hall Hotel in Charnock Richard closed in February without notice to staff and visitors, as the then owners tried to strike a deal with the government over the potential new use. The move left employees out of work, and nearly all planned functions and weddings were canceled without warning.
However, the plan which would have seen rural Chorley Hotel used as temporary accommodation for people awaiting asylum decisions and it has since only reopened once for a club night celebrating Wigan Pier’s anniversary. Owner Aysha King has now placed the company into liquidation in a process managed by Smith & Barnes Insolvency Practitioners; a company also known as Affordable Liquidators. An initial inventory prepared by the company reveals that the company has no assets and debts of £960,000.
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This includes £228,000 owed to HMRC; £130,000 owed to Mr King on a director’s loan; and £39,000 owed to former partner Best Western. Another £29,000 is due to Chorley Borough Council.
Many local small businesses also face the prospect of running out of money for goods and services provided in the past. Standish-based site wrap company Illusions of Grandier owes £3,700; Cheadle Hulme-based Symphony Textiles has £68,000 outstanding; and a meat supplier owes £16,000. Also included are £86,000 owed to SSE Electricity and £50,000 to Santander.
Documents submitted to Companies House confirm that the liquidator was officially appointed on May 4, when a resolution was passed to begin the liquidation process. Although the business was sold to Harwinder Singh for £3million during the pandemic, Ms Khan remains registered as sole director and she is listed as chairman in the liquidation resolution.
LancsLive previously reported that before its formal appointment, Smith & Barnes contacted potential creditors to warn them of the impending liquidation. In his letter he stated that the ‘tangible assets and business of the company had been sold to Mr Singh’ for £3m, with the funds being used to repay Goldcrest Finance Ltd who had provided a loan for the purchase precedent of the hotel in 2019. According to Smith & Barnes, “this will be considered by the duly appointed liquidator”.
The letter goes on to blame the pandemic for being the cause of the financial troubles that led to the company’s impending collapse. He said: “Due to the Covid-19 pandemic, the company has been unable to trade due to the restrictions put in place. Even when the company was able to trade, significant trading restrictions were still in place and the company was unable to trade at full capacity, and thus started with cash flow problems.
“The company secured a small rebound loan from the government funding program which was used to pay for the company’s expenses. This removed some short term pressure, but unfortunately it was not enough to support the cash flow and the ongoing costs of the company.”
He concluded that the company was unable to continue to pay its debts as they fell due, the offer of £3 million was made and accepted. This was used to pay off the majority of the nearly £4m debt to Goldcrest, with the shortfall written off.