According to traders in the secondary debt market, the price of QMH debt has fallen by up to 20 per cent since plans for a debt-for-equity swap were posted to bankers a week ago.
One fear is that prices have fallen so far that US vulture funds, which make a turn by buying into sick companies, may be tempted to buy the debt and force the heavily indebted hotel group into liquidation.
In a study prepared for the banks last year, the accountants Grant Thornton concluded that QMH's revolving credit facility class of debt would be worth 55p in the pound in a liquidation, and the multiple option facility would be worth 20p.
One bank's revolving credit facility debt is said to have traded at 45p in the last week, and US vulture funds are prepared to pay 35p. The other facility is said to be quoted at around 17p.
A banking source said the disquiet was caused by opportunistic US investors, who had bought the debt at higher prices than presently rule. 'US secondary debt traders appear worried about the price of the debt they bought, as they did not understand the nature of the beast,' the source said. 'Those hoping for a short-term profit appear to have been caught out.'
The US bank, Bankers Trust, reportedly bought some of the revolving credit facility at about 60p. It is unclear, however, whether this was for its own book or for a client.
QMH's management, headed by chief executive Andrew Coppel, has constantly fought to prevent the company's debt from trading while it was restructuring the group. But two members of the eight- strong steering committee - Credit Suisse and Royal Bank of Scotland - have done so, sparking an angry reaction from the joint co-ordinators, Barclays and National Westminster.
The management has been more successful in stopping trade in its mortgage debenture stock. A fall in the value of the hotels has triggered a clause that means 25 per cent of the mortgage debenture holders could enforce the security they have on some of the prime properties.
But the big stakes are held by UK investment management houses, none of which has sold so far, in spite of offers from arbitrageurs. However, QMH has accepted offers on three of the 14 hotels it put on the market. There is also said to be interest in some of the others.
QMH shares were suspended at 47.5p on 31 March last year. They are now considered worthless.