Barclays is set to suffer a shortfall of more than £6m following the administration of Newcastle-headquartered Utopian Leisure Group (ULG), Insider can reveal.
ULG, which entered administration on 22 September 2014, acted as a holding company for four well-known North East bars, which were sold for more than £500,000.
Insolvency specialists from Deloitte were called in after the company suffered an inability to fund the capital expenditure required for two of its subsidiaries; Sam Jacks and Loveshack.
The trading subsidiaries of ULG operated the licensed venues of Sam Jacks (Newcastle), Fat Buddha, Loveshack (both in Durham) and Box (Belfast). Three of the four venues sold were loss making and required "significant capital expenditure" to return to profit.
Turnover ULG had dropped significantly in the year to 31 December 2013 to £35.4m from £54.5m the year before.
The company had £7.6m of secured lending with Barclays Bank, which relates to two term loans.
A report to creditors said: "On present estimates it is not anticipated that the secured creditor will be paid in full." A shortfall of more than £6m is expected.
The shortfall is despite rescue deals being agreed. Two acquisition vehicles, Hot Buddha and Ulysses Leisure, paid a combined £511,502 for the venues.
Hot Buddha acquired Fat Buddha for £352,006 plus £25,000 deferred consideration, totalling £377,006. Ulysses Leisure bought Sam Jacks, Loveshack and Box for £109,496 and £25,000 deferred consideration, totalling £134,496.
Bob Senior, a majority shareholder at Utopian Leisure, is also the majority shareholder at both Hot Buddha and Ulysses. A total of 220 jobs were saved as part of the rescue deal.
The administration appointment was regarding ULG only, not any of the trading subsidiaries and venues, which continued to operate as usual.