The Addington Palace Hotel is in fixed charge receivership after concerns it could not pay its creditors.

The famous hotel is owned by Addington Palace Limited, part of the Westmead Group.

Its mortgagee, the Hanley Economic Building Society, appointed Bob Young as a Fixed Charge receiver after it was worried about the repayment of its loan.

The building society had already submitted a petition to wind up against Addington Palace Limited on March 26, meaning it believed the company was unable to pay its debts.

Bob Young, a partner in firm Begbies Traynor who specialise in corporate rescue, restructuring and recovery and personal insolvency, said his appointment was a “purely protective” measure.

He added: “We have made it clear to the director we have no wish to stop the business trading.

“John Power, the director, has made it clear he intends to fund ongoing trading so customers should notice no change in service.

“We are in dialogue with Mr Power about a number of long term funding options and there is no intention to force a quick sale. There is not much more I can say at present as this will involve a long term solution but I am pleased to confirm that Mr Power, the building society and ourselves are all working to a long term and satisfactory solution with good co-operation from all parties.”

Craig Davis, manager at the Addington Palace Hotel, said: “The business has not changed. We are continuing to operate after some restructuring.

“We are still owned by the Westmead Group and it is business as usual.”

But it is unclear the impact this will have on staff as the receiver’s priority is to collect rents for the mortgagee, with any additional funds then paid to employees.

It follows the news the Aerodrome Hotel, another holding of the Westmead Group, had gone into administration, with appointed administrators PriceWaterhouseCopper saying the company had “run out of options”.

Mr Power said both measures were purely to finance a restructuring of the business in a time when getting bank funds is difficult due to the economic downturn.

He has stated anyone with bookings or events planned at either venue will not be affected by the measures, despite both businesses effectively up for sale.

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