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Brothers' company in difficulties Brothers' company in difficulties
(20 minutes later)
Two Londonderry brothers with a £500m commercial property business have had 30 of their 75 companies placed into administration.Two Londonderry brothers with a £500m commercial property business have had 30 of their 75 companies placed into administration.
Patrick and Hugh Hegarty own the W G Mitchell business.Patrick and Hugh Hegarty own the W G Mitchell business.
W G Mitchell owns properties in Northern Ireland, Scotland and England which are leased to third parties.W G Mitchell owns properties in Northern Ireland, Scotland and England which are leased to third parties.
Ernst & Young, who have been appointed as the administrators, said the companies had been operating in a challenging market place.Ernst & Young, who have been appointed as the administrators, said the companies had been operating in a challenging market place.
"They have been finding it increasingly difficult to meet the significant backlog of creditors as well as ongoing debt service obligations."They have been finding it increasingly difficult to meet the significant backlog of creditors as well as ongoing debt service obligations.
"The business model under which the companies have been operating was becoming unsustainable.""The business model under which the companies have been operating was becoming unsustainable."
Ernst & Young said it would continue to operate the companies whilst considering options for selling them.Ernst & Young said it would continue to operate the companies whilst considering options for selling them.
Hotels
Part of the W G Mitchell portfolio includes the 200,000 sq ft Richmond shopping centre in Londonderry which is leased to another company.Part of the W G Mitchell portfolio includes the 200,000 sq ft Richmond shopping centre in Londonderry which is leased to another company.
Trading at the the shopping centre will continue as normal.Trading at the the shopping centre will continue as normal.
The 30 W G Mitchell companies in administration also own two hotels in Edinburgh's Grassmarket, which they bought for £54m in October 2006 and leased back to Apex hotels.The 30 W G Mitchell companies in administration also own two hotels in Edinburgh's Grassmarket, which they bought for £54m in October 2006 and leased back to Apex hotels.
The portfolio also includes property in Charlotte Square and George Street in Edinburgh and developments in Glasgow, Perth and Fraserburgh in Aberdeenshire.The portfolio also includes property in Charlotte Square and George Street in Edinburgh and developments in Glasgow, Perth and Fraserburgh in Aberdeenshire.
The Hegarty family began investing in property in Northern Ireland in the 1960s.The Hegarty family began investing in property in Northern Ireland in the 1960s.
Their W G Mitchell company moved into the Scottish market in the late 1990s developing a focus on hotels.Their W G Mitchell company moved into the Scottish market in the late 1990s developing a focus on hotels.
At the end of 2008 the company was attempting to raise money through the sale of two of its hotels.At the end of 2008 the company was attempting to raise money through the sale of two of its hotels.
The Bonnington in London was put on the market less than a year after W G Mitchell bought it from Irish hotelier Jim McGettigan for about £70m. Its Radisson hotel in Edinburgh was also up for sale.The Bonnington in London was put on the market less than a year after W G Mitchell bought it from Irish hotelier Jim McGettigan for about £70m. Its Radisson hotel in Edinburgh was also up for sale.
Last year's Sunday Times rich list estimated that Patrick Hegarty and his family had a fortune of £40m.Last year's Sunday Times rich list estimated that Patrick Hegarty and his family had a fortune of £40m.