Hotel Pair Are Left With Suite Nothing

Feb 3 2008 Additional Reporting By Jane Barrie

Rescue Firm Walk Out On Deal Landing Couple £14,500 In Debt

HEATHER and Jon Floyd ploughed their life savings into a hotel and built it up from scratch.

Their proudest day came when visit scotland recognised their hard work and awarded them a three-star rating.

But then Jon fell ill with lung disease and they decided to sell.

A firm run by Essex businessman Steve Williams handed them what seemed like a lifeline...they would run the hotel for six months then buy the lease.

But his firm Quartet Hospitality Management ran up huge bills, failed to make a profit and pulled out at the last moment.

Jon, who is now £14,500 in debt, said: "They are scumbags who prey on those at their lowest ebb."

Jon and Heather, who have a 25-year lease on the Northumberland Hotel in Newington, Edinburgh, signed up with Quartet in December 2006.

He said: "I was seriously ill and wanted to know the hotel would be taken care of."

Their contract was with Quartet Hospitality Management (Edinburgh) Ltd, which was founded the day before the Floyds signed the deal.

It stated Quartet would receive 60 per cent of the operating profit and the Floyds 40 per cent.

Chef Jon, 46, said: "They put their own managers and staff in.

"We'd built up a good business and doubled our profits in a year."

But alarm bells rang when they did not receive payments or accounts. Jon said: "We would see the hotel in darkness. Functions had been cancelled."

Then Quartet pulled out of the deal to buy the lease days before they were to conclude missives.

Jon said: "They claimed the lease wasn't worth the £350,000 we'd agreed. They said it was worth £200,000 and offered us a further £25,000. "

The Floyds finally took the hotel back in August and found a horrifying trail of debt.

Jon, who has three children Jenna, 24, Kevin, 18, and Georgia, eight, said: "We've had to pay back £14,500. They took the profit but never paid bills. The accounts are in our names so we are liable."

Quartet boss Williams has refused to repay the money.

Jon discovered Williams applied to have Quartet Hospitality Management (Edinburgh) Ltd closed down in September.

He said: "We have been told there is nothing we can do. It is devastating."

I discovered Williams has been a director of 10 firms, including Quartet Hospitality Management, Quartet Recruitment, QHM Chelmsford and Crestwood Estates Ltd.

He resigned from two and a further two are dissolved.

Last night he denied his firm had done anything wrong.

He said: "There may have been outstanding bills for around £14,000 but sometimes in business you do lose.

"That was part of the risk that everyone takes in a venture like this. In fact, it has cost us £20,000 and Mr Floyd effectively closed down our Edinburgh operation.

"We had just paid £10,000 rent to the landlords in advance and had settled a VAT bill but received no benefit from either expense.

"We agreed to split any profit 60:40 but the figures showed there was no net profit.

"Quartet Hospitality Management (Edinburgh) Ltd had to fold because we had no money. If anyone was shafted it was us."

The only option now is for Jon to let a court decide.

It's a lesson learned for him...it pays to scrutinise the small print before checking into a deal.