A BUSINESS owner took out a loan of more than £1 million from his company before it ceased trading and is now being pursued for bankruptcy.

The Argus can reveal the director of Brighton Holiday Homes Ltd Neil Stonehill withdrew £1,024,281 over and above his salary from the company “for his personal benefit” before it closed.

That is according to insolvency firm Quantuma, which has just released a report for creditors.

The company ceased trading on May 28, telling its customers their bookings would no longer be valid and leaving people in the lurch.

Eight members of staff were also left without jobs.

The company, which opened in 2009, provided accommodation in the city for holidaymakers, with an emphasis on hen parties, which had to pay for their holidays six weeks in advance.

It acted as an agent, letting properties on behalf of the owners.

More than 97 landlords and businesses in the city are owed sums ranging from £1 to £500,000.

Among those owed money is HM Revenue and Customs, which is owed £60,000.

Brighton and Hove City Council is also owed more than £5,500.

Neil and Michelle Stonehill, who are company director and secretary respectively, sent an email to customers before ceasing to trade.

It said: “It is with great regret that due to the challenging economic conditions, Brighton Holiday Homes has ceased trading with immediate effect.

“You will not be able to access the property you have booked so please do not travel to Brighton unless you have alternative accommodation.”

The Argus was flooded with emails from desperate customers and furious homeowners.

They could not contact each other because they did not have one another’s details.

In response to the collapse, business advisory firm Quantuma was appointed as joint administrators of the company.

A report seen by The Argus called The Joint Administrator’s Proposal details the amount owed to various parties.

It details how the company, which was established in September 2008 by Neil Stonehill, had a turnover of more than £2,600,000 in 2013.

But because of cash flow problems and competition from Airbnb, by 2016 “the business started to become reliant on loans to support its day-to-day trade”.

In December 2018, Mr Stonehill sold one of his properties and put the money into the business.

Despite this, the director’s loan account was overdrawn by the sum of £1,024,281.

The report said this sum was “utilised by the director for his personal benefit, over and above the director’s salary, or any declared dividends”.

Quantuma representatives met with Mr Stonehill. He told the insolvency firm he could not afford to pay back the million pound sum.

In total, businesses and landlords were left out of pocket by more than £1,500,000.

The report states: “The review of the company’s records highlighted an overdrawn DLA [director’s loan account] in the sum of £1,024,281, in respect of company funds utilised by the director for his personal benefit, over and above the director’s salary, or any declared dividends.

“Accordingly, on 12 July 2019, the joint administrators served the director with a statutory demand in the sum of £1,024,281, in respect of the overdrawn DLA. This demand gives the director 21 days to settle this balance in

full. Following a meeting between the director and Paul Zalkiin, one of the joint administrators, it was apparent that the director does not have sufficient cash reserves to clear his liability to the company.

“The joint administrators will therefore look to petition for the director’s personal bankruptcy once the 21 days have expired.

“Once bankrupt, the joint administrators’ claim will rank equally with all other unsecured creditors of the directors, in his bankruptcy estate.”

The Argus was unable to contact Mr and Mrs Stonehill.