Hunstrete House Limited had been operating the Somerset hotel under an agreement with Von Essen Investments, a company controlled by former director Andrew Davies prior to the group’s administration last month.
The business had been making a loss for several years and had only continued to operate thanks to support from Von Essen.
However with the appointment of administrators from Ernst & Young, Von Essen has given the operator three months’ notice to terminate its contract and as such as withdrawn all support.
All members of staff at the hotel have been notified of the liquidation, and have been paid up to date. Von Essen will seek alternative employment for them at other properties within the group in the Bath and Bristol region.
Any outstanding trade creditors will be contacted by the liquidator for an initial meeting of creditors.
Sir Charles Prew, who joined Von Essen as chief executive in March this year, said the liquidation was regrettable but there was “no option”.
“The combination of notice being served by von Essen Investments and the continuing losses of the hotel mean that the Administrators could no longer continue to support the business,” he said.
“We are pleased that we have been able to arrange that all staff will be paid up to date and we will be doing all that we can to find them employment in our other hotels in the region which, along with other group hotels, will continue to operate as usual.
“We will also be working hard to ensure that customers with outstanding bookings will be able to make alternative arrangements in other group hotels in the region which will honour deposits they have already made and match the terms of their previous arrangements.”
The liquidation of Hunstrete House will have no effect on the operation of the remaining 26 hotels in the Von Essen group, which are continuing to trade as normal for now. However experts believe it is “only a matter of time” before further properties are sold.
A spokesperson for Ernst & Young confirmed the group had received “significant interest”, but said it was too early to tell whether the group would be sold as a whole or on an individual site basis.
Davies was released from his position as director of Von Essen on 20 April upon the appointment of administrators. A spokesperson for Ernst & Young said: “He was removed by a turnaround specialist to ensure control of the group and minimal disruption to the hotel operation business.”