A former Provence pub run by company secretary Peter Kiely has closed after the
freehold-owner tabled a demand for a huge rent hike.
The Derby pub in Dalton Road, Barrow, Cumbria, was one of 10 that Peter Kiely's company Birchwood Leisure began running after the
collapse of Provence at the end of October last year.
Kiely, who previously ran Provence's managed division Countrywide Inns, installed licensee Annie McDowell as the Derby's manager and wanted to develop eight
letting bedrooms at the site. But problems arose when the pub's freehold-owner, Irish investor Patrick Mannix, of Cork, demanded an £8,000-a-year increase in rent to bring the total annual rent bill to £38,000 per annum.
Kiely told a local newspaper: "The market rent for that property is probably around £24,000 which I believe could be independently verified.
"We were happy to pay £30,000 because our equipment was in place and Annie McDowell was in place. We did everything right, but were not going to have someone demanding £14,000 above what it's worth because it would then become unviable economically. They feel they can run it better themselves."
Licensee Annie McDowell said the pub was likely to reopen in a few weeks after being taken over by its freehold owner.
Provence made big profit at property auctions by offering leasebacks to itself at above-market rents. Last week, Provence's unsecured creditors were told by receiver Kroll that they would receive nothing in the wake of the collapse of the company.
Kroll said: "Short-term gains on properties were offset by long-term losses on the leases - the business model was unsustainable long-term."