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It's curtains for chain which owns Blakes hotel
Jonathan Prynn and Mira Bar-Hillel03.10.08
London hotel company GuestInvest - which owns Blakes, that opulent hang-out in Kensington - has collapsed into administration.
Its biggest backer, Bank of Scotland, part of the troubled HBOS banking group, was today being blamed for the failure.
GuestInvest is best known for its advertisement bearing the slogan "Earn Money While Others Sleep."
The collapse is likely to leave hundreds of investors who have backed the business out of pocket.
It currently has five hotels, four in west London, including Blakes which was bought from hotelier Anouska Hempel last November, and one in the City.
The company, founded in 2003 by entrepreneur Johnny Sandelson, was backed by £200 million of funding from Bank of Scotland two years ago.
Its move into administration appears to be a direct result of HBOS running out of capital to lend to clients during the ongoing credit crunch.
Last night administrators said it had run out of money. "We will be assessing the position of the group," they said.
However, they stressed they have already been able to find a new owner for Blakes, which is unaffected by the insolvency and was today open as normal.
The GuestInvest concept allowed private individuals or companies to buy a hotel room, stay there for nothing for up to 52 nights a year and receive a rental income.
Gerard Nolan, an industry expert, said the hotel room investment model can work and it might be possible to arrange a rescue package for the group.
