Former £500m property tycoon declared bankrupt

Former £500m property tycoon declared bankrupt




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By Shelley DeBere

An Edinburgh-based property businessman, who controlled assets worth £500 million before the recession, has been declared bankrupt, reports the Scottish Herald.

 

Patrick Hegarty’s WG Mitchell empire stretched the length of the country, and at its height, included the Radisson hotels in Edinburgh and Glasgow as well as London’s Park Inn.

 

The company, once a leading client of the Royal Bank of Scotland, has now become one of the recession’s highest-profile casualties.

 

WG Mitchell grew from a family run chain of Northern Ireland-based butchers, and prospered by taking risks in property at a time when the country was plagued with terrorist activity.

 

Mr Hegarty’s firm moved to Scotland in the early 1990s after purchasing the Wardpark Industrial Estate in Cumbernauld. Later the businessman developed a taste for Edinburgh and moved there a few years later – making it the site of the company’s joint headquarters, the other being in Derry.

 

Commenting on the demise of the property mogul’s empire, a former business associate of Mr Hegarty said: “He was colourful and flamboyant. He was a major, major player for RBS. At his peak, he had an eye for undervalued property but, like so many others, the market just went against him.”

 

The tycoon’s portfolio consisted of a host of other investments, including shopping centres in Glasgow and residential addresses in Edinburgh, as well as other prominent hotels including the Apex and Point in Edinburgh and Lang’s in Glasgow.

 

The company also jointly owned a £150 million property fund with Edinburgh-based AWG Property.

 

The family-run business was suspected to be in trouble after it began offloading assets in 2007-2008 – leading to RBS calling in administrators last April for 29 of approximately 75 WG Mitchell subsidiaries.

 

Talking to the BBC, Mr Hegarty said that the bank was “acting in haste” – while RBS retorted by saying it was the “last resort” for the company and they had been working for some time to resolve its problems.

 

The administrators Ernst and Young went on to put up for sale £85 million worth of property last year and added another £40 million worth of property more recently.

 

According to the Scotland Herald the entire business is now in the hands of administrators.

 

The Edinburgh Gazette reported that Mr Hegarty’s estate was sequestrated on August 30, following a petition to Edinburgh Sheriff Court by the Bank of Ireland.

 

In the same way other major property developers have fallen foul of the downturn, Mr Hegarty’s financial woes are believed to have been compounded after he made personal guarantees to the banks, in order to secure the maximum lending facilities. He will now automatically be barred from holding company directorships for the duration of the sequestration.

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