Queensborough goes to court over broken deal
Hotel and holiday park group Queensborough Holdings is suing three companies for damages of more than £1.36mfor alleged deceit following the collapse of a planned hotel deal.
Its High Court claim accuses Fordgate Ltd, Moises Gertner (a partner in Fordgate) and Dunstone Management Ltd of deceit and negligent misrepresentation. It is also suing Fordgate for breach of contract.
Queensborough Holdings intended to raise £25m from the sale and leaseback of its Hotel Burstin in Folkestone to help pay for a planned expansion of its embryonic restaurant chain.
It was negotiating to buy 46 Deep Pan Pizza and Bean and Olive restaurants for £10m to add to its four Fresco restaurants (which have since been sold).
Queensborough exchanged contracts in September 1998 with a Gibraltarian company called Faversham Properties. Queensborough claims it was led to believe Faversham was a 50:50 joint venture between Dunstone and Fordgate.
It alleges that it was repeatedly told that Fordgate had the money to complete the sale and leaseback and that funding was not dependent on larger property deals or financing facilities.
However, the sale was not completed by the deadline date. Despite a number of extensions, the deal was never completed and was rescinded by Queensborough at the end of 1998.
Its writ also refers to an article in The Times, in October 1999, when Fordgate claimed that it had nothing to do with Faversham or Dunstone, was not involved in the sale and leaseback, and that no joint venture agreement was ever made.
Queensborough said the losses of more than £1.36m included the costs of circulating information to shareholders, bank fees for refinancing, legal fees of £399,000, staff redundancy costs, and continuing losses of £2,500 a month charged by bankers for new financing.
Queensborough owns nearly 15 holiday parks, a visitor attraction, and two hotels in the UK. It is in the process of being delisted after being bought by Cloudburst Holdings (a group of major shareholders).
by Sarah Limbrick and Angela Frewin
Source: Caterer & Hotelkeeper magazine, 28 September to 4 October 2000
