SCOTLAND'S biggest independent hotel chain has threatened to cut off power and water to an exclusive timeshare resort in a bitter row over utility bills.
Macdonald Hotels has warned the 3,000 owners at the Loch Rannoch development that unless they pay a disputed bill of £450,000 by next week, it will cut off the supplies to the prestige lodge complex.
The ultimatum is contained in a letter f
rom Robert Scott, finance director of Macdonald Resorts, which has been in dispute with the timeshare owners for the past five years.
In the letter, seen by The Scotsman, Scott warned the owners' committee that unless "full payment" of the sum the hotel chain claims it is owed is made by 24 July the group would have "no alternative" but to cut off the lodges' water and electricity.
The letter was sent to Loch Rannoch Highland Club, which represents the 3,000 timeshare owners of 85 lodges at the Loch Rannoch Resort.
In 2003, timeshare owners led by chairman Bill Gent, Roderick Galbraith and Allan Kenneth took control of the club's committee. They took the management contract away from Macdonald Hotels and awarded it to another member, Edward Monks, director of Timeshare Management Services (TMS).
Macdonald Hotels continued to supply utilities to the site and now claims the owners owe £451,352 for water and electricity from July 2003 to May 2008.
The management committee disputes this figure and submitted a payment to the hotel group in May for £177,819 – but only on the condition it was accepted as payment in full.
Monks told The Scotsman yesterday: "We paid for the electricity but we paid it under condition they accepted the cheque as the settlement of the liability between us and them.
"They owe the club some management fees but they refuse to accept that condition."
The hotel admits it has refused to pay the club management fees for 164 weeks of timeshare while they are in dispute with the committee. But the group has rejected the committee's payment as "wholly unacceptable".
"We only took the decision to shut down the electricity and water because their terms insisted the payment was full and final," said Gordon Fraser, deputy chief executive of Macdonald Hotels and Resorts.
The hotel group says the club owes a further £440,000 for management fees over and above those fees currently being collected annually by the club. Other fees add up to more than £1 million.
Now the hotel group has engaged Paul Cullen, QC, and intends to take the club to court to collect the debts after the club rejected an offer to settle the debt for over £500,000 last year.
The terms of last year's deal would have allowed members access to leisure facilities at the Macdonald Loch Rannoch hotel next door, which they have been banned from using since the new committee took control in 2003. Other terms included management of the club reverting to Macdonald Resorts in 2010 when TMS's contract lapses.
How relations soured at first resort of its kindTHE 85 cottages beside the idyllic Loch Rannoch in Perthshire were built in 1976 as the UK's first timeshare resort.
It was developed by Barratt International and timeshare pioneer Frank Chapman.
In 1991 Macdonald Hotels, owner of the neighbouring Loch Rannoch Hotel, took a 50 per cent stake in nine of Barratt's timeshare resorts, including the one at Loch Rannnoch.
In 1996 when the hotels group floated on the stock exchange, it bought Barratt out.
The move was controversial and led to a collapse in relations between the hotel group and the owners.
Owners claimed that the buildings were in need of repair and fees shot up to cover the costs.
And in 2003 a group of activists timeshare owners took control of the committee and agreed to transfer management of the timeshare from Macdonald Hotels & Resorts to Timeshare Management Services.
Macdonald Hotels & Resorts responded by banning members from hotel facilities, arguing the new committee had not negotiated a new contract.
A court date set for May 2006 was postponed for negotiations to go on but the two groups were unable to reach a agreement.
An offer from the committee to buy Macdonald Hotels out of the hotel for £2m was later rejected.
In 2007 Macdonald chairman Donald Macdonald proposed a settlement that was also rejected by the committee.
The full article contains 737 words and appears in The Scotsman newspaper.
