Owens Directors’ £4m loss
HUGH SULLIVAN
Draft accounts of CFEC Ltd, the company which developed the Owens entertainment centre in the former Debenhams building in Robertson Street in 2022 and which filed for insolvency in August, have been released. Prepared by joint administrators Nicholas Simmonds and Chris Newell in the form of a Statement of Proposals to creditors, the accounts show that CFEC had unsecured losses exceeding £5.6m. Of that sum, the two directors of the company, which previously traded as C&O Entertainments Ltd, claim to have invested over £4.44m of their own money since its incorporation in June 2021.
Gregor Macrae is a creditor in the administration for nearly £334,000; co-director Lubov Chernukhin, former investment banker married to one-time Russian oligarch Vladimir Chernukhin, is shown to be owed over £4.1m.
In a narrative summary, the administrators report that the enterprise, which involved full internal refurbishment of the building, had a budget of £2.25m (upped from an initial figure of £1.5m). It opened for business in October 2022, but the first management accounts drawn up only a month later showed that projected numbers regarding footfall and sales “were clearly impossible to achieve.”
“External bad press did not help the situation, and the staff were threatened physically”, the narrative adds.
Turnover for the year to September 2023 was calculated to be £862,221 but the “admin expenses” amounted to over £2.6m. The losses, funded by Mrs Chernukhin, accumulated monthly until closure.
The draft accounts list the only assets of the company at that point as £22,800 cash at the bank plus £65,200 worth of office furniture, plant and equipment, none of which has yet been realised.
CHERNUKHIN RICHES
Mrs Chernukhin, born in Russia when it was still the centre of the Soviet Union but now a British citizen, can presumably afford her loss. In 2021 she was reported in the Guardian newspaper to have paid the Conservative party more than £2.1m in donations over the previous nine years. The press report also featured the Chernukhins’ ownership of a superyacht plying the Mediterranean and Caribbean seas, a private jet registered in the Isle of Man and a £30m London townhouse overlooking Regents Park.
No source of Mrs Chernukhin’s riches has ever been publicly disclosed, though the ‘Pandora Papers’ leaked by the International Consortium of Investigative Journalists in 2021 revealed that she and her husband were involved in a network of offshore investments which have avoided investigative scrutiny. The draft accounts of CFEC state that initial funding for the Owens enterprise came from a British Virgin Islands company, Sunny Gulch, “on behalf of Mrs Chernukhin”. Another £400,000 was provided controversially by the Hastings Town Deal Fund – £150,000 being received by the company, £250,000 by the freeholders of the building, Moxie Management Two Ltd (MM2).
Former founding director of the company, Graham Owen, claimed last year, after being ousted from the board in March 2023, that he had himself invested about £400,000 of his own. However, he is not shown as a creditor in these accounts.
TRADE & EXPENSE CREDITORS
Other major creditors are identified as Fear FX, manufacturer of ‘scare products’ based in Bognor Regis, who are owed £278,000; MM2, who are owed £226,000; Hastings Building Services (HBS), the main building contractors on the site, who are shown as being owed two separate debts of £164,000 and £187,000; and Hastings Borough Council (HBC), who are named as creditors in respect of three separate sums – the £150,000 Town Deal “grant”, a £2,512.50 “bid levy”, and £49,235 (unspecified).
Chris Dodwell, director of HBS, says that the debt owed to his company has been double-counted in error. In September 2023, when Owens closed its doors, suggesting at the time it would be a temporary shutdown, he claimed the amount owed was £157,000.
As to the HBC debts, it’s not clear why the Town Deal figure should be treated as a repayable sum, though it’s an academic question only: there seems no possibility of any creditors receiving a dividend after the administrators have paid themselves from the limited assets recovered. The unspecified sum of £49,235 may be unpaid rates.
FREEHOLDERS SEEK NEW TENANTS
The directors of MM2, the property company which bought the freehold of the Debenhams building and are now looking for fresh tenants, have issued a press release.
In it, director Bella Landen said: “Owens Entertainment promised so much, but failed to deliver the quality leisure offering expected. We tried to work with Owens parent company CFEC Ltd to resurrect their leisure business and were deeply disappointed when they decided to go into administration in August 2024.”
Co-director Sophie Hubble, however, has accentuated the positives: “We’ve invested a considerable amount in improving the infrastructure. Ultimately, this means that the building is better positioned to meet the needs of a wider variety of tenants. Also, Moxie is not a huge conglomerate, which means that we can be more flexible in our approach, and quicker to act.”
Ms Landen added: “This also means that we are better placed to engage with the local community. We’ve already built, and will continue to build, strong and invaluable links. We are currently in talks with a local arts organisation and Love Hastings, to decorate the security boarding outside the building – which has been put up to protect the windows while it remains unoccupied.”
The property will be going to market through local commercial agents Dyer & Hobbis. “Our aim”, said Ms Hubble, “is to partner with a tenant or tenants who share our passion for Hastings and will deliver a mix of uses that enrich the town, making it a site that we can all say we are truly proud of.”
We hope you have enjoyed reading this article. The future of our volunteer led, non-profit publication would be far more secure with the aid of a small donation. You can also support local journalism by becoming a friend of HIP. It only takes a minute and we would be very grateful.
This was an absolute failure from the beginning , How on earth did they think local families could afford the massive charges they were asking families to pay. Hastings has always been known as a poor town , with many families just managing to exist, That being so so , The Borough and Local councils have a lot to answer for .