The receivership follows the collapse of Buckingham's support plan, agreed in February 1994 and extended to this month, due to the loss of support from a significant majority of large creditors.
The group was formerly run by the Jivraj family, who first made their name in the leisure industry in the mid-1980s with London Park Hotel. The Jivrajs turned Buckingham around from losses of £220,000 to profits of £5.41m pre-tax in the year ended October 1990, in their first year in control.
However, the Gulf war and recession in the US pushed the company into a loss. The share price collapsed as analysts began to question the company's financing strategy related to new developments in Europe, specifically the Clima Sol development in Portugal. Most of the profits were earned from its US hotels in Texas and Florida.
In September 1993, Buckingham drafted in a new chief executive, John Clarke, and the Jivraj family members took a back-seat role. Mr Clarke, former chief executive of the Devenish pub group, embarked on a bank- enforced asset disposal spree to help repay some of the group's £90m borrowings, which had pushed gearing to 220 per cent of shareholders' funds.
The company's plight was exposed in 1993 when property write-downs of £96m plunged the group into a £103m loss.Reuse content