Jobs are secure as four-star hotel goes into receivership

BY ENDA CUNNINGHAM

ALL 130 members of staff at the plush four-star Clayton Hotel in Galway have been told their jobs are secure, after Ulster Bank appointed a receiver to the business this week.

The owner told the Connacht Tribune he was “crushed and devastated” having lost the business on Tuesday morning.However, receiver Kieran Wallace of KPMG said the hotel will continue trading as normal, and he is confident it will have a profitable future.

All bookings and deposits for functions will be honoured, and the day-to-day running of the hotel will not be affected.

The hotel, which was owned by developer Shane Connolly, had been trading extremely well in recent months.

The receiver said: “Unfortunately the Clayton, like many other hotels throughout the country, has been affected by events outside of its control.

“However, it remains a sound business with an established reputation for quality and luxury, and we are confident that working with the hotel’s staff and management team that it will continue to trade successfully and profitably into the future,” he said.

Mr Wallace was appointed receiver over Chequer Hill Investments and Three Corner Holdings Ltd, which own the Clayton.

Despite restructuring his business interests several years ago to protect the hotel, the collapse of Mr Connolly’s Marcon Developments last month caused a domino effect and prompted Ulster Bank to move to protect its position in relation to the Clayton.

The bank now ‘owns’ the Clayton and it will be run by Mr Wallace as a going concern.

An emotional Shane Connolly, who lost the hotel on Tuesday morning, told the Connacht Tribune: “This has taken a lot out of me emotionally, financially, personally and professionally. When you build something out of nothing, nurture it and develop it, then you have to give it away, it crushes you. I have to think about the 130 workers and their families.

“We are all devastated. My main objective is to ensure that the hotel has minimum impact. It is a situation where there are no winners. It's primarily due to a hostile court case against my development company [Marcon], which I am legally prevented from commenting on.“I am not in the business of apportioning blame. Suffice it to say that the current economic global downturn has choked the life out of the development market, which unfortunately and regrettably has brought the Clayton into its web.

“The unwavering hard work of each and every current staff member at the Clayton has to count for something. It is my dearest wish that the hotel continues to trade. The hardest experience was informing the staff,” said Mr Connolly.

A statement from the hotel reads: “The hotel continues to trade as normal. All of the hotel’s 130 full and part-time staff will continue to be employed. There will be no interruption in trade and all customer bookings and deposits will be honoured.”

Last month, Marcon Developments collapsed into liquidation with debts of almost €20m. Mr Connolly was among the creditors and was owed around €8m.

The ‘house of cards’ fell when Mr Connolly was unable to reach agreement with John Sisk & Sons over a €2m debt – relating to a development site off the main street in Oughterard – and a liquidator was then appointed.