Pay up or you'll lose pub, LESG hosts told

Tenants of the collapsed London & Edinburgh Swallow Group (LESG) have been told to keep up rental and insurance payments or risk seeing their leases cancelled. The "pay up or else" warning came in a letter sent out to licensees this week by administrator Ernst & Young.

Hosts have also been told that all future beer deliveries have been placed on a cash-with-order basis. Failure to deposit money 48 hours in advance of the normal delivery day will see supplies suspended, said the company.

Credit management company Avance Group has been appointed by Ernst & Young to supervise the future running of all trading accounts. Worried licensees say, how-ever, that the letter does not address other major concerns such as tenancy deposits paid to LESG and payments handed over for beer which was not delivered after the company went under.

Hosts fear they will never see the vast majority of money they have handed over to LESG paid back.

Ernst & Young said this week it was seeking purchasers for the business but in order for it to operate tenanted operations, licensees had to honour rent and insurance obligations.

LESG went into administration on 14 September. The company ran 670 pubs nationwide but the fixtures and fittings on 240 venues, predominantly made up of managed hotels and houses, have since been acquired by the freehold owner Flodrive, which set up a new company, Oxford Inns & Hotels.

Licensee Kevin Gibson of the White Horse, Tattingstone, near Ipswich, said he had paid £4,000 for beer which had not been delivered. "I also want to know what will happen to my £3,000 deposit but nobody can tell me and it looks as if I might become one of many creditors of L&E. I tried to contact my area manager but it appears his phone has been cut off," Gibson said.

Derek Sephton, who runs the Kings Arms in Downholl-and, Lancashire, said it had been chaos since L&E went under. "I am owed a load of money for dilapidations work which L&E failed to complete, so what happens to this now is anyone's guess," he said.

l Business Opinion - p12

pub company's demise is no surprise to tenants

Angry licensees have been left floundering in confusion and chaos following the

demise of London & Edinburgh.

Empty L&E offices and absent business development managers meant many hosts were left without information for 11 days following the

collapse of the company.

Letters from administrator Ernst & Young which began to arrive at pubs last Monday were the first official contact for many licensees.

Confirmation the company had ceased trading came as little surprise to many across the estate. Tenants revealed they had been struggling without proper backing from the company for months.

Host Steve Gilligan of

the Scarisbrick Arms,

Downholland, Lancashire,

described L&E as "the

invisible pub company".

Gilligan revealed he saw his area manager once in a blue moon and had been left to run the business for more than a year without any checks from the company. "I can honestly say I do not even know the name of my current area manager," said Gilligan.

"Area managers were leaving all the time and there must have been a colossal staff turnover," he said.