The BBC has shed light on the story of a hotel repossessed by Royal Bank of Scotland (RBS) before being sold to one of its own subsidiaries.
The BBC has in the past week published the story of Mr Chris Richardson, former owner of the Coniston Hotel in Sittingbourne, Kent. Mr Richardson and his business partner, Ernie Berntsen, had bought the once dilapidated hotel in 2008 and using their own funds and borrowings agreed with NatWest, part of the RBS group, they invested £4m into the renovation project.
After two years of hard work, the bank decided in 2010 that they would no longer be able to maintain the funding and would be transferring the pair into RBS’ Global Restructuring Group (GRG) – just 10 days before opening.
Despite having a string of bookings already confirmed upon opening, including several wedding functions, the GRG decided that the business was in distress. On the basis of a property valuation carried out at the request of the GRG, the hotel was considered to be worth £2.5 – £3m, despite a valuation just months earlier of £7.7m. This valuation had put the business in breach of the loan to value covenant of the loan agreement.
From there, Mr Richardson and his partner were removed from the business and the hotel was sold to the RBS’ own property company – West Register.
Speaking to Kent Online, Mr Richardson showed his original faith in the bank, saying “After banking with them for so many years, we were sure they were there to assist us, but no, they had their own agenda.”
In the years since his ordeal, Mr Richardson attempted to seek justice from RBS and found himself shocked by a discovery in the recently published Promontory Report into the bank’s conduct. As he read the report, Mr Richardson discovered that his own experience had been included within the report, as had details of what had happened after he had been removed from the day to day running of the business.
Details within the report showed that not only had West Register ultimately bought the hotel, but representatives from the company had actually been in a meeting with bank officials and property valuers and made comments to undermine the value of the hotel. The bank claims that West Register had in fact been the highest of six bidders and had therefore handled the situation fairly.
The situation above is one that many people will be familiar with. Anyone that has been a customer of RBS and been forced to sell property by the GRG ought to give consideration to who they ultimately sold to.
If you have suffered losses as a result of being part of the GRG or have had to sell a property to West Register, then we would urge you to get in touch. If you are considering a claim or have any questions, please call us on 01204 322 805.