Von Essen hotel chain founder Andrew Davis ‘exaggerated its assets’

By Sarah Bridge for The Mail on Sunday

Administrators of the collapsed von Essen hotel chain have accused founder Andrew Davis of overestimating the assets of the company, even after it had gone into administration having buckled under nearly £300 million debt.

Von Essen founder Andrew Davis

Troubled times: Von Essen founder Andrew Davis ‘exaggerated its assets’

Davis submitted a statement of affairs for the company at the start of this month in which he said von Essen could pay its debts in full and be left with a surplus of £22 million to pay off unsecured creditors.

But the administrators in their report on the company said this was 'unlikely'. It is understood that Davis and former group finance director Stephanie Gibbs might face action over the accounts, which are understood to have exaggerated earnings, profits and asset values.

The auditors are also preparing a case against Grant Thornton, the company's auditors which signed off the accounts.

Meanwhile a valuation of the company's properties, which include landmark hotels such as London's Hotel Verta and the Royal Crescent, Bath, has found they are likely to be worth less than £200 million, leaving banks that lent von Essen £256 million with a shortfall.

Companies involved in fitting out the luxury hotels are also out of pocket to the tune of £1.2 million and it has also emerged that von Essen faces county court claims totalling £276,000.

The 28 properties are currently being marketed for sale and are thought to likely to be split up rather than sold as one company.