The owner of the Vaults bar and restaurant has emerged as a leading candidate to buy back the failed nightspot, just weeks after it collapsed leaving creditors out of pocket by at least half a million pounds.
The Vaults, which is co-owned by well-known digital entrepreneur Russell Townsend, went into administration in October this year, after getting into cash flow difficulties that were threatening its future.
But Mr Townsend has now emerged as one of the main candidates to buy back the bar through his new vehicle, DBT Bars, a venture founded earlier this year and trading from the same accountants’ offices as the operation that previously managed the Vaults.
DBT has had a “managing and trading” agreement with the upmarket bar and restaurant on Newhall Hill since it went into administration earlier this year.
Meanwhile, creditors could be set to lose out on as much as £650,000, with administrators saying there was so little in the way of assets left in the company that it was not even worth convening a meeting of creditors.
The site is leased on a yearly basis, while all the bar and restaurant equipment is rented.
There is only one secured creditor, Jeffrey Alford, who was owed some £150,000. Administrators said they had been unable to make contact with Mr Alford since taking over duties at the company.
Unsecured creditors include Birmingham City Council, the taxman, food and drink suppliers and dozens more. They are owed a total of £506,376 between them.
A report put together by administrators at nearby financial company Poppleton & Appleby said even if a sale was made there was very little chance of any money being paid to unsecured creditors. Negotiations are under way with a handful of potential buyers, but DBT Bars has already indicated it will make a formal offer.
DBT was founded by Mr Townsend in May this year. He left as director in September to be replaced by a Mr Colin Townsend, but remains sole shareholder.
Mr Townsend, who is head of Birmingham digital agency Clusta, could not be contacted to comment on the case.
Administrator Andrew Turpin, of Poppleton & Appleby, had earlier said the firm had an “external but connected” buyer lined up for the Vaults, but when contacted recently said he could not comment on the ongoing case.
The Vaults was opened just over two years ago by Mr Townsend and fellow entrepreneur Julian Brown. It is set in the cellars of the listed Newhall Place, a former workhouse.
While at least one office Christmas party was moved away from the Vaults after the financial problems emerged, the bar continued to trade throughout the administration.
The twist in the ownership at the Vaults is just the latest move in a wave of financial troubles that has hit some of Birmingham’s popular city centre bars.
Although the pub and bar industry as a whole has struggled during the recession, high-end professional spots have fared the worst. Most recently, the Living Room nightspot on Broad Street was closed down after administrators failed to find a buyer for it.
Most of the chain of bars owned by the Living Room’s owners were sold on, but the future of the Birmingham site is now up in the air after the bar was boarded up.
Over the last year, the list of nightspots that has closed down or gone in and out of administration in Birmingham has grown to include Epernay, Utopia, Bar Room Bar, and Bar 110.
* Where are these city centre bars now?
Epernay, the Mailbox
Owner Utopia Inns went into administration this summer, and the Mailbox bar was sold in a pre-pack deal. Epernay kept trading until it was passed on to its new owners Cotswold Inns and Hotels.
Utopia, Church Street
Also a former Utopia Inns bar, this was part of the deal with Cotswold Inns and Hotels, who relaunched the bar as ‘Utopia the Country Bar’.
Living Room, Broad Street
Kept trading for months after the collapse of its owner, Premium Bars and Restaurants, while administrators looked for a buyer. While most of the upmarket Living Room chain around the UK was sold on, the furture of the Birmingham branch is unlear.
Bar Room Bar, the Mailbox
Was launched in a blaze of publicity about two years ago by two local entrepreneurs. But after the company collapsed, leaving creditors owed tens of millions of pounds, the flagship Mailbox outlet had to be sold back to its former owners for a fraction of the price.
Bar 110, Colmore Row
Closed in August. The restaurant, bar and club had been open for around six years on its plush city-centre site.