Liverpool bar entrepreneur made bankrupt with debts of £2.6m

In late 2010 the person largely cited as pioneering Liverpool’s thriving bar scene has been declared bankrupt with debts of £2.6m. Rob Gutmann has seen his empire of stylish Liverpool city centre bars and restaurants slip from his fingers over the past few years. Many have either closed or been sold as a result of the businessman’s decline.

Mr Gutmann, 44, told the local paper (Liverpool Echo) are the time of the announcement that he is no longer involved in the running of any of his former bars and but that he remained  philosophical about his bankruptcy. According to Mr Gutmann, his former bankers were too quick to withdraw support during the economic downturn and he cites this as the main reason for the collapse of his businesses.

The collapse of his companies resulted in many Liverpool based firms and suppliers left out of pocket amide unpaid debts.

Mr Gutmann’s empire of bars and restaurants started life in 1994 when he opened The Lyceum Cafe Bar, followed by Blue Bar and Grill in 1998, In July 2001, he spent £1m refurbishing a another unit at the Albert Dock to create the PanAmerican Club and was also behind some of the city’s other most popular nightspots such as Korova and Alma de Cuba.

Problems started in late 2005 when Lyceum Company went into liquidation. Despite having raised £3m through the sale of three of his Albert Dock venues it was insufficient to pay off scores of trade creditors owed hundreds of thousands of pounds. The proceeds of the sales were sufficient to pay off Lyceum’s bank, HSBC, but was not enough to cover the other debts of the business which reportedly lost £358,000 the previous year.

Despite opening up other venues in 2006 onwards, and buying up 3 other bars in 2007 some of the prestigious Albert Dock venues were sold by his Korova Corporation to TGI Ltd for an undisclosed sum and at the time, the disposals were stated as being part of Korova Corporation’s expansion in Liverpool. In October 2007 Korova Corporation announced the opening of Circo – a 17,000 sq ft circus themed bar in the tried and tested Albert Dock and by this time the business was operating several venues in Liverpool.

Yet in August 2008 the complex structure of the Korova group of companies started to unravel when NVRP, formerly Korova Corporation, and KVRP (which ran Korova) went into administration. By February 2009 a further company, Docklands Bars Limited which held the licenses for several venues following the fallout of the Korova group had creditors knocking and a trade supplier threatened to issue a winding up petition unless the firm settled a debt. A month later Docklands Bars Limited was put into administration owing £920,000 and eventually Mr Gutmann was declared bankrupt late in 2010 with personal debts of £2.6m.

Many of his former bars, including Blue Bar and Alma de Cuba, continue to operate under a totally different ownership.

Mr Gutmann said: “I hope people in Liverpool will respect what I have tried to do in the city. And I remain very proud of venues such as the original Blue Bar & Grill, Korova and Alma De Cuba in particular which were all recognised at various times as being symbols of the city’s revival and regeneration….”

He added in the Liverpool Echo: “Like others have reported in the leisure industry at the first sign of trouble lenders ran for cover and in our case loan funding that had been agreed was withdrawn at a key stage.

“The knock-on effect of promised finance not materialising is catastrophic to business cash flows when commitments have already been made to start development projects.

“The absence of support from lenders has led to businesses having to try and ‘trade out’ of what was becoming an increasingly difficult market as people concerned about their houses and jobs simply started using bars and restaurants less and less.

“In my case bankruptcy is a consequence of lenders attempting to ‘call in’ personal guarantees.

“It is an all too common story in the past couple of years and I agree with the reported view of Anthony Worrall Thompson that the banks were far too quick to withdraw their support to businesses in our industry.”

This story is all indeed all too common amongst many industries in Liverpool, the UK and indeed across the World as a result of changing bank lending practices amid the continued economic struggle and fallout from the Credit Crunch. Mr Gutmann’s story shows like the formerly successful Gordon Ramsey in his industry that even once prosperous, liquid and profitable businesses can fall into difficulties and in turn cause untold issues cash flow problems with those around them.

There is a domino effect to stories like this where landlords, trade suppliers and other have reduced cash flow, increased debts and bad debts, but the cycle of financial fallout and collateral damage can be broken or diminished for those who take suitable precautions.

CCDR is a leading UK Debt Recovery specialist with international reach and a client base of SME’s and multinational organisations. Our services include:  Debt Recovery, Debt Mediation & Debt Dispute Resolution, Business Reports and Debtor Tracing, Outsourced Credit Control and Corporate Legal Services.

For more details, call our Liverpool Debt Recovery head office or use the Contact Us section of the site.

Read More on the original story see here.

This entry was posted in Blog, Industry News