The Castle

A 'warts & all' account of the transformation of a run-down pub in Bradford-On-Avon into a 'proper' Inn (food pub with rooms). Written by Alex Reilley & Pierre Woodford

Sunday, January 07, 2007

It's a wrap

After 10 days of complete stress remarkably the deal goes through. We're almost not convinced it could have happened. Bizarrely we become landlords for a week (we don't charge any rent as that would have probably been the last straw) although the pub has already been shut for a few weeks. I text Pierre who's in New York when the deal goes through, there's a mixture of excitement & anticipation. There's a long way to go & the hard work has only just begun, not to mention Pierre has just found out he's going to be a dad for the first time & his new born is due at exactly the same time as we expect to be opening!


The bank finally get back to us about exactly how much they are willing to lend. It's reasonabally good news & with agents breathing down our neck we enter into the final stretch. We're going to buy the leasehold first & at the same time exchange on the freehold with a completion a week later. However as each days passes a new snag seems to appear.

Snag 1

The bank have lost our account opening form, therefore we are required to fill out a new one. No problem you'd think. Well the form is fine but each shareholder has to ID themselves at their local branch. This is going to take time & we can't register for VAT (which we need to complete the deal) without our bank details. We hurriedly get everyone to the bank in order to get our account open.

Snag 2

Our business manager needs to get personal guarantees signed by all of the directors in order to release the funds. This doesn't sound complicated until he explains that he needs to see the directors in person to do this as it's a policy of the bank. With Pierre in London & Lee near Blackpool this poses an interesting problem.

Snag 3

Peter's property deal has slowed up & he won't have the money in time. Loungers can just about bridge it but with a big VAT return to pay we sail mighty close to the wind.

Snag 4 (major snag)

Having taken some (very expense) VAT advice our solicitor informs us that we have to buy the freehold first & then buy the leasehold, not sooner than a week afterwards & that there is a bloody good reason for this. If we to do the leasehold deal first VAT would need to be added to the freehold sale. Whilst we get the VAT back in a few months it would mean us needing to find £84k! In addition we would not only get pushed into a new stamp duty threshold but, unbelievably, we would also pay stamp duty on the VAT!

I call the agent to inform him of this, it sounds as if the owner is about to burst - I know how he must feel, my head feels like it's going to explode!

Peter's in!

A couple of days after meeting with Peter I get an out-of-the-blue email. Following a chance meeting with his accountant at a wedding in Cornwall, Peter is declaring himself in! We're delighted, particularly as the dynamics feel right.

Peter's money is tied up in a property deal that should complete soon. We now need to get a move on.

We meet Peter

We meet over at Peter's house & really hit it off. He likes the scheme & believes strongly that it will work however he expresses concerns about it being a high risk investment but seems encouraged by our background & past & present success. Peter concludes that he needs to talk it through with his accountant & by the end of the meeting we're unsure whether he's in or not. It's 50:50 & we won't know for another 10 days or so. If nothing more as someone local his reaction has encouraged us we're doing the right thing.

An investor

A couple of days after speaking to Philip he calls me to tell me a good chum of his called Peter Dixon is interested & wants to meet. A major plus point is that Peter is local & has lived in Bradford for years. As proverbial outsiders we like the idea of getting someone local involved. I make contact & we organise to meet.

The pressure mounts

With the deal beginning to drag we start to get pressure from the seller's agent. We're accused of delaying the deal in order to tie up the freehold transaction with the leasehold purchase. Who us...never! This is not helped by our last visit, when relations between us & the owner were just a tad frosty. In addition we decide it would probably now be a good idea to address the fairly large blackhole in our finances & take the decision to offer up 20% of our merry scheme to an investor, ideally for £100k.

I put the word out to the usual hopeless gossips as well as speaking to a couple of contacts in the industry. This include Philip Addis, who owns the award wining Bath based Great Western Wine. I have known Philip for the last 7 years & have the utmost respect for him & his company. Philip says he may know a couple of people who might be interested. He'll be in touch.

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