Balls Brothers CEO returns to group following administration
Sullivan was – it is believed – essentially removed from his position as chief executive at the group, which operates 19 sites across the capital, by Richard Balls, chairman and part of the founding family, 10 days ago.
The move by Balls seems to have been one of the factors that triggered lead lender Barclays Bank to act – it effectively took control of the firm at the weekend, bringing back Sullivan to run the business and appointing Zolfo Cooper, the corporate finance house, to find a buyer for the group.
It is thought that Barclays was instrumental in putting Sullivan in to the group in April this year – the appointment was one of a number of conditions that the company agreed to in order to retain Barclays’ support.
Slump in profits
According to reports the company had repeatedly breached its banking covenants and has outstanding debts of £7m – raised largely to finance its acquisition of Lewis & Clarke in 2006.
In the year to January 2009, the last accounts at Companies House show that the company slumped from a post-tax profit of £2.6m to a loss of £224k.
Following the appointment as administrator, Nick Cropper of Zolfo Cooper said: “The Balls Brothers business has been an established name for over 50 years and is extremely well known across the London leisure and dining sector.
"The company has a great heritage and enjoys a lasting reputation due to its high standards in service, food and wine, and is sure to generate significant interest.”
Mark Stretton is editor of BigHospitality's sister publication, M&C Report.
