On a dull January Saturday, before England relaxed Covid restrictions, the Wolseley restaurant on London’s Piccadilly was so packed with clients slurping pre-lunch oysters that there was only standing room at the bar.
It did not look like a business on the brink of insolvency.
But this week Corbin & King, which owns the Wolseley and eight other restaurants, was plunged into administration by its majority shareholder, the Thai hotel group, Minor, which said the business faced “major liquidity constraints” and required “strong financial support”.
The announcement triggered panicked phone calls from guests with reservations fearing the Wolseley would be shut down for good.
Minor was clear the restaurants would continue to operate as normal. But its move is the latest sign of a bitter battle for control of a group of restaurants that count TV cook Nigella Lawson and fashion designer Paul Smith among a long roster of glitzy clientele. Joan Collins once declared Wolseley’s Souffle Suisse the best meal she had had in London.
Minor, which took a 74 per cent stake in Corbin & King in 2017, wanted to cut costs during the pandemic and expand the Wolseley brand worldwide. Jeremy King, founder and chief executive of Corbin & King, wants to retain control of the company he started and focus on a small number of openings in London and one in New York.
The battle has come to a head over Corbin & King’s default on £ 33m of loans owed to Minor, a hospitality group that operates around 2,300 restaurants in Asia and 520 hotels worldwide.
“In a decent investor situation, if they just rolled on the [loan] and let us build the company we would not be insolvent, ”King said.
He took to YouTube this week to tell customers the company was “under siege” from its investor but the restaurants were in “rude health”.
He told the Financial Times that trading had been volatile but the company’s earnings in the past seven months were higher relative to the same pre-pandemic period.
Minor said it would not be “drawn into a war of words” and that its “principal objective has been, and will always be, the commercial success of its businesses”.
Like all central London restaurants, the Wolseley, situated in a high-ceilinged former car showroom by the Ritz, has suffered badly during Covid. Footfall in the city center is only gradually recovering after the government’s work from home guidance ended this week.
Corbin & King’s venues, which also include the Delaunay on the Strand and Colbert on Sloane Square, have been closed or trading under restrictions for most of the past 22 months.
King, who ran storied London dining rooms including Langan’s Brasserie and The Ivy before starting Corbin & King with his business partner, Chris Corbin, in 2003, has been outspoken against many Covid measures. In one email to customers he called the tier system announced in October 2020 “another knee jerk, ineffective, window-dressing, butt-covering initiative that hasn’t been thought through properly”.
In 2020, the group’s like-for-like sales fell 58 percent, according to its most recently filed accounts. Its pre-tax losses widened from £ 4.9m in 2019 to £ 10.3m, while turnover almost halved to £ 22m.
It has not been an easy pandemic for Minor either. In 2018, it acquired the Spanish hotel group, NH Hotels, for € 2.3bn – an ambitious bet that expanded the company’s previously Asia-focused portfolio by around 380 hotels, most of which were leased rather than freehold.
When the pandemic set in, NH had to take on more debt to meet its lease bonds. Despite reducing expenses, in the first quarter of 2021 it averaged € 29m in monthly losses.
The chief executive of another international hotel group described Minor’s chair Bill Heinecke as “an aggressive and growth oriented businessman” adding that the NH Hotel journey has been the most difficult [transaction for them]”.
Minor denied NH Hotels had strained its finances and said “we continue to invest in our businesses where appropriate”.
When Minor bought its stake in Corbin & King, part of its £ 58m investment was a £ 20m loan note due in 2024. The hotel company also took on a £ 13.25m loan Corbin & King owed to HSBC and could not repay when it came due in May 2020 – during the UK’s first Covid lockdown.
Minor initially reassured King and the company’s auditors that it would not call on the bank loan, King said, but later did, in turn triggering the £ 20m loan note for repayment too.
It has also trademarked some of Corbin & King’s brands in Singapore against King’s wishes, according to two people close to King, while its offers to recapitalize the company came with strings attached that involved King giving up some control.
Minor said “there is great scope for expansion of Corbin & King into key international markets” and that it had proposed that King retain “customer-facing aspects” of the business while it managed the corporate side.
King, who has been fighting long Covid as well as disputes with the Wolseley’s landlord and company insurers, attempted this month to use a recently introduced legal moratorium to protect the business – a move Minor said was “unauthorized” and prompted it to file for administration.
The restaurateur has courted alternative backers, the US investment firm Knighthead, which recently helped the car rental firm Hertz avoid bankruptcy.
One person with knowledge of Knighthead’s strategy said the fund had offered several times to refinance Corbin & King’s debt over the past year but had been rejected. “You can not put an asset like Jeremy has in a three star hotel,” the person said.
It is now for the administrators at FRP Advisory to oversee the restaurant group’s future. As principal creditor, Minor has the upper hand but could face having to pay more than the value of the debt to retain control of the company if there is competition to buy it.
Nick Jones, chief executive of Soho House, and a regular at Corbin & King’s restaurants said there would be “a queue” of interested parties: “It’s a great business but it would have to have Jeremy.”
Additional reporting by Antoine Gara in New York