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Liquidator appointed to Kilkea Castle
06 January 2010
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A liquidator has been appointed to the firm running Kilkea Castle, Ireland's oldest inhabited castle, after a period in examinership failed to settle a dispute about rent.
The hotel's management company, Leoville Limited, entered examinership in November and emerged from court protection in the week before Christmas. It had been seeking a reduction in the level of rent paid to its landlord Arnosford Ltd, but both parties failed to reach agreement on this issue and a creditors meeting was called to wind up the firm.
Joe Moreau of accountancy firm Byrne Moreau Connell was appointed liquidator at the creditors' meeting on Monday. The case represented a departure from the normal procedures governing examinerships. Typically, a court appoints a liquidator to a company after an unsuccessful examinership so it was quite unusual that a creditors' meeting was called in this instance to appoint a liquidator to Leoville Limited.
Kilkea castle in Co. Kildare was built in 1181 and was home to the 11thEarl of Kildare, Gerald Fitzgerald and Silken Thomas.
The four-star hotel had been trading as a hotel until 2006, but the hotel had suffered trading losses in recent years as the economic downturn hit the tourism business.
Leoville Ltd had liabilities of €1.5 million and its directors had supported it with loans of more than €889,000. The losses were attributed to the decision to open a 45-bedroom lodge complex in the adjoining golf course and a “dramatic reduction” in international tourism.
By altering the hotel’s business model and concentrating on weddings and corporate functions, the directors had succeeded in reducing all major overheads except the annual €515,000 rent payment. Leoville leases the castle from Arnosford, a Hong-Kong registered company, and the main aspect of the rescue plan was based on the need to reduce this rent. The rent due to Arnosford, however, was separately pledged to Anglo Irish Bank, according to the directors.
During the examinership period, both parties failed to reach an agreement on the rental issue and so a creditors meeting was called on Monday to wind up the hotel's management company.
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