Scores of Norfolk businesses are owed tens of thousands of pounds after the company behind one of Norfolk's most iconic hotels brought in liquidators.
GC Hotels Ltd – which ran Gorleston's Cliff Hotel – owes creditors, including many local suppliers, almost £1.9m. The hotel is open as normal but it will be operated by a new company.
GC Hotels, owned by businessman Panos Christophi, blamed a business rate bill from Great Yarmouth Borough Council of around £160,000 for causing it to seek voluntary liquidation.
A report from the liquidators Parker Andrews said the hotel's business rate was retrospectively re-rated by the council in 2016.
GC Hotels came up with a plan to pay the £160,000, the liquidator's report said, but this plan was rejected by the council.
'The cost of dealing with the Council in 2016 meant that the company's cash flow position started to worsen,' it said.
Liquidators added the company appeared to be insolvent both in terms of cash flow and its balance sheet.
It means suppliers across Norfolk, from food and drink firms to IT companies, are owned tens of thousands of pounds and will have to wait to hear how much they will get back.
One meat supplier is owed more than £18,000, while another fish supplier is owed more than £34,000.
But the biggest creditors are firms linked to Mr Christophi.
Some creditors will hope to find out more details at a meeting of creditors tomorrow about why the company is going into voluntary liquidation.
It posted strong net profits last year of £366,372, up 60pc on the previous year.
One creditor, who did not wish to be identified, questioned why £2.2m had been spent by GC Hotels refurbishing the three-star Cliff Hotel when a separate company owns the building and site.
The liquidator's report justified the money spent by saying that, although the cost of refurbishment was high, the trading performance of the business was strong and justified the costs.
They also questioned how GC Hotels reduced a loan from its director in 2016 by around £300,000 – the same year it said it could not afford the business rate demand from Great Yarmouth Borough Council of £160,000.
Owner and director Panos Christophi had loans totalling almost £800,000 to GC Hotels in 2015 according to its accounts. But in the latest accounts produced by the liquidators, that had been reduced to £487,000.
Another creditor said: 'We are disappointed that it has come to this. It seems to have suddenly ended with no real warning other than they were slow at paying.'
Mr Christophi also part owns the Cliff Hotel building and land through a company called CAPS Property Ltd.
The other owners of CAPS Property are his business partner and family member Sotiris Christophi and Antonia Hillier.
The ownership of the hotel is staying with CAPS Property, while Daryn Ferguson, who has been general manager at the hotel for the past five years, said he is taking over ownership of the business which runs the hotel, under the name East Anglian Hotels Ltd. That business is also part owned by Antonia Hillier.
Mr Ferguson said that as far as the venue was concerned, it was very much a case of 'business as usual'.
'It's really important to make our customers aware that all bookings will be adhered to and there is no change in the day to day operation of the hotel and restaurant,' he said.
'Having worked here for five years I absolutely love the building and the business and it is something I am proud of and always have been.
'GC Hotels have put a lot of money into this business and turned it from a dusty old hotel into something that is very nice and really positive for Gorleston.
'Unfortunately, earlier this year the borough council wrote to the company to ask for a business rate increase. They were asking for a £160,000 lump sum payment which just couldn't be met.
'GC Hotels came up with a plan to pay that back in instalments but the borough council wouldn't budge.
'There were lots of negotiations but I think in the end Panos had to decide whether he wanted to pump even more money into the business.
'It's really sad that people are owed money and I am one of them, but unfortunately that is the nature of business and something that can happen. I have to try and look forward now.'
GC Hotels is registered at Aston Shaw accountants in the Union Buildings on Rose Lane in Norwich. Aston Shaw has been contacted for comment.
•Firms owed the most
Firms from catering equipment suppliers to energy companies are amongst the list of creditors, but those owed the most money by GC Hotels are those linked to its director Panos Christophi and his business partner.
Mr Christophi is listed as one of the creditors owed £487,000.
A firm he part owns called CAPS Property, which owns the Cliff Hotel building and land, is owed £263,000.
He owns CAPS Property with family member Sotiris Christophi of Aston Shaw accountants.
Aston Shaw, meanwhile, is listed as a creditor owed £83,700, while firms registered at Aston Shaw's offices The Union Building on Rose Lane in Norwich are also owed money.
They include GZ Electrical Contractors, owed £20,278, and Norfolk Management Services owed £145,000.
Norfolk Management Services are owned by the Cliff Hotel's manager Daryn Ferguson and Antonia Hillier who also own the firm taking over the running of the Cliff Hotel.
Another company registered to Aston Shaw's offices called Y Construction is owed £436,350.
•Do you have a story about a local business? Email mark.shields@archant.co.uk
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