Herald Inns enters pre-pack administration

Herald Inns & Bars, the company headed by Julian Sargeson, has entered a pre-pack administration.

A new company, Cougar Leisure, headed by Sargeson, has emerged to operate 21 of Herald's 37 sites.

The administration comes after Herald closed 11 loss-making venues with onerous leases in the past few weeks.

A total of 16 sites remain with administrator Ernst & Young. A pre-pack administration is a route taken by several companies this year as a way of ditching their "toxic leases" - those very difficult to sell-on because of their high rental obligations.

The closed sites suffered from the smoking ban, shifts in the circuit and excessive rents. Sargeson, who became chief executive at Herald last year, told the Morning Advertiser: "We've had very good support from HBOS, who have maintained funds in the Cougar Leisure business."

It is understood that Cougar Leisure will continue to operate from Herald's former offices in Chorley. There have been a handful of redundancies at the Chorley office.

Hemway, the management company of tycoon Trevor Hemmings, parted company with its business partner HBOS in respect of the Herald Inns & Bars business in April.

Hemmings held shares in Herald, but they had no value because Herald has lost money for a number of years.

A new company, HIB Collective, was formed by managing director Julian Sargeson and business associate Peter Callaghan, in partnership with bank HBOS, to run the Herald business.