Shelbourne made a loss of €307,000 in 2007

THE FIVE-STAR Shelbourne Hotel in Dublin made a loss of €307,000 in 2007, the year it reopened for business after a €125 million makeover.

That year is at the heart of a legal battle between the hotel’s operator, the Marriott Inter-national chain, and the property’s owners, who include developers Bernard McNamara and Jerry O’Reilly.

The owners are seeking to end the 20-year management deal with Marriott.

They have alleged mismanagement by Marriott and have claimed that there was a serious breakdown in the hotel’s financial systems in 2007.

Marriott has denied that any default has occurred that would justify the termination of its agreement, and has offered €1.2 million to settle the dispute.

The High Court last month granted the owners access to the hotel’s books and records.

Accounts filed this week by Torriam Hotel Operating Company Ltd, which is controlled by Marriott, refer to the legal spat.

“The directors are satisfied that no provision is required at the date of approval of the financial statements in respect of this dispute,” the directors’ report states.

The accounts were signed off on January 16th this year by auditors Deloitte Touche. This was almost 13 months after the year-end and outside the normal nine-month time frame afforded to companies in Ireland to file their accounts with the companies office here.

The accounts show that the 262-bed Shelbourne generated turnover of €10.5 million in 2007. This was just €58,417 ahead of the cost of sales that year.

Torriam was pushed into the red by a combination of administrative expenses of €263,686, interest payments of €87,491 and a tax charge of €14,240.

It had accumulated losses of just under €1.2 million at the end of December 2007.

Notes to the accounts state that the “directors have considered carefully the company’s budgets and cash flow projections and are satisfied that the company will have sufficient working capital to enable it to continue to trade for the foreseeable future”.

Its 408 staff were paid €8.2 million between them in wages and salaries. This rose to €9.1 million when social welfare and pension costs were included. The accounts indicate that the Shelbourne’s payroll costs are charged to the hotel’s owners.