Peterborough City Council has already forked out around £620,000 in administrators’ fees linked to the collapse of the company behind the unfinished Fletton Quays Hilton hotel — and a new report confirms the authority is unlikely to claw back the full £17 million it is owed.
The stark assessment, issued by joint administrators Teneo, lays bare the growing financial damage surrounding the troubled riverside development.
Despite the council holding first-ranking secured creditor status over the site, administrators warn that may still not be enough to shield taxpayers from a massive loss once the half-built hotel is finally sold.
“It is not expected that sufficient funds will be realised to repay PCC in full,” the report states bluntly.
£1.17m pumped into administration — with £620k swallowed by fees
The report also reveals just how much public money has already been poured into managing the collapse itself.
Administrators say Peterborough City Council has provided approximately £1.174 million in funding since they were appointed in October 2023.
Of that, around £620,000 has already been used simply to settle administrators’ fees.
The council-funded cash injection was used to secure the abandoned site, fund insolvency operations and cover costs where the failed company itself had no available money.
Sale deal finally agreed — but secrecy remains
After months of delays and negotiations, administrators confirmed contracts for the sale of the unfinished hotel were exchanged on 28 April 2026.
Completion is expected within 60 days — by 23 July 2026.
But crucial details remain hidden from the public.
Administrators say they cannot yet reveal either the sale price or the identity of the buyer because of “commercial sensitivity”.
They claim more information will only be released after completion in a future progress report.
Council could wait months for any repayment
Even when the sale completes, the council may still face a long wait before seeing any cash returned.
The report says an initial distribution could arrive within “3–4 months” after completion of the sale — although the expected amount has not been disclosed.
Interest is also continuing to rack up on the council’s debt, which stood at around £17 million when the company entered administration.
The unfinished Hilton at the centre of the collapse
At the heart of the financial disaster sits the part-built Hilton hotel at Fletton Quays.
The council had agreed major capital funding for the 160-room scheme through loans to the development company behind the project.
Administrators confirm the council holds a first-ranking fixed charge over the unfinished hotel and a floating charge over other company assets under a debenture created in May 2020.
But despite that powerful legal position, the report warns the final sale proceeds still will not cover the full debt owed.
Security guards and emergency works added to mounting costs
The administration has continued draining money while the empty building sits unfinished.
According to the report, permanent manned security has been required at the property to satisfy insurance requirements.
Urgent remedial works were also needed to deal with problems at the site.
Those ongoing costs have helped drive the administration bill higher while the council continues funding the process.
Contractor collapse triggered project chaos
The report sheds further light on how the development unravelled.
RGB P&C Ltd — the original main contractor — entered liquidation in July 2022 before construction was completed.
Administrators say the company behind the hotel may now be entitled to recover money through a pre-administration performance bond linked to the contractor.
A claim has been submitted for the bond’s maximum value of around £1.7 million.
However, lawyers acting for the bond provider are still assessing the validity of the claim, meaning no recovery is guaranteed.
£4.9m debt shrank to just £380k settlement
The report also details efforts to recover money from companies connected to the wider Propiteer group.
Intercompany debts originally listed at around £4.9 million were ultimately settled for just £380,000 after legal negotiations.
That agreement involved an £80,000 upfront payment followed by monthly instalments of £20,000 over 15 months.
Administrators confirm the reduced settlement has now been recovered in full.
Other creditors likely to miss out completely
While the council may eventually recover part of its money, the outlook for others is even worse.
A second-ranking secured creditor owed around £10 million is not expected to receive anything because administrators do not believe enough money will remain after the council’s claim.
Unsecured creditors are also facing bleak prospects.
Administrators say they have received 28 unsecured claims worth around £4.2 million but currently do not expect sufficient funds to pay them — except possibly through a limited prescribed-part distribution.
Administration could drag on beyond October
The insolvency process is currently due to end by 17 October 2026.
But administrators are already preparing to ask the court for more time.
Outstanding work includes finalising the hotel sale, pursuing the £1.7 million bond claim, sorting VAT and tax matters, repaying council funding and making distributions to creditors.
Council insisted sale must achieve “best value”
Peterborough City Council has defended its approach, saying officers recommended marketing and selling the hotel site in order to secure “best value”.
Council documents show the authority worked alongside selling agents CBRE and administrators throughout the bidding process.
However, meetings discussing offers and negotiations were held behind closed doors under commercially confidential rules.
The troubled Hilton development has now become one of the most politically sensitive financial headaches facing the authority — with taxpayers still waiting to discover just how much of the £17 million black hole will ultimately be recovered.
It is worth noting, too, that early administrator assessments appear to have warned privately that the economics of completing the Hilton were already under pressure — years before the council formally opted for a sale.
