The issue of whether a hotel valuation should include fixtures, fittings and equipment is being thrashed out between Hambros Leasing and Weatherall Green & Smith in the high court.
Hambros is suing WG&S for damages resulting from a valuation of three leaseholds in the Londonderry Hotel in Park Lane, London.
In 1989 Brent Walker Hotels Division agreed to buy the leases and sell them to Hambros who would then grant an underlease of the premises to Brent Walker. Weatheralls valued the hotel at £42m.
But in 1992 Hambros repossessed the property after Brent Walker broke a long-term leasing agreement to run the hotel and failed to complete extensive refurbishment. The insurance company is now claiming the policy only covered the building – it did not include the fixtures.
Hambros claims their acquisition of the hotel was based on WG&S valuation. The bank is now suing the valuers for £1.35m claiming the the original figure was an over-valuation because it included fixtures and fittings and that true value was £40.5m.
WG&S marketing director Paul Jaffa said: “We are arguing that we were asked to value a hotel. If you exclude the fixtures, fittings and equipment you do not have a hotel, you only have a building. They are not saying the valuation was negligent.”
EGi News 07/02/97
