Lumley Castle Hotel acquired out of administration

Lumley Castle Hotel, a 14th century hotel near Chester-le-Street, County Durham, has been saved from closure after being acquired out of administration by its owner in a pre-pack deal. The hotel entered administration after encountering financial difficulties, with its previous structure being described as “not sustainable”.

PKF GM’s Oliver Collinge and James Sleight were appointed as joint administrators of the business, brokering the subsequent rescue deal, which saw the hotel acquired by current owners Lord Scarbrough and his trustees, in partnership with Bespoke Hotels. Following the pre-pack acquisition, Bespoke Hotels will manage Lumley Castle on behalf of the owners.

Joint administrator Oliver Collinge of PKF GM commented: “This was a challenging transaction delivered within a short timeframe and we are delighted to have achieved an outcome which preserves this historic business, providing continuity for all employees and, importantly, ensuring the continuity of the business to facilitate future weddings, events and room bookings.”

The pre-pack deal secures 120 jobs at the hotel and safeguards the business’ future. Lumley Castle was built in 1388 and has been under the ownership of the Earl of Scarbrough for centuries. Following more than 100 years being used by the University of Durham, the property became a 73-bedroom hotel during the 1970s, when it was tenanted by No Ordinary Hotels. The hotel has hosted thousands of weddings and other events and also features an escape room.

Lord Scarbrough said that “notwithstanding the best efforts of the previous tenants”, the current structure of the business “was not sustainable”. Lord Scarbrough added that, as a result, “I agreed with my trustees to take the property in-hand acquiring it from joint administrators Oliver Collinge and James Sleight of PKF GM, to ensure that one of the principal hotels of the county continues to be a key destination for guests, weddings and conferences.”

Bespoke Hotels CEO Thomas Greenall added: “We are delighted to manage Lumley Castle Hotel on behalf of the new business owners. It is a truly outstanding hotel in a wonderful location. We look forward to working with the hotel team to continue to offer a fabulous welcome for those visiting this beautiful part of the country as well as playing an important part in the local community.”


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