Debt-ridden Hall dynasty in crisis

THE family firm of former Newcastle United chairman Sir John Hall has plunged into the red, deepening a financial crisis that threatens to engulf the property tycoon.

Cameron Hall Developments made a total operating loss of £90m in the year to November 2000, according to accounts just filed at Companies House.

The news follows revelations last week that Wynyard Hall, the family's country estate in County Durham, had been put up for sale at £8m.

The accounts, filed six months late, also show that the huge loss was struck after a £53.8m write-down on the value of Cameron Hall's property assets.

They reveal that Hall's Guernsey-based family trust has had to come to the rescue with an £18.8m cash injection and a £16m loan to Cameron Hall, in return for shares in Newcastle United as security. But shares in the club are now worth so little that Cameron Hall cannot be sure of repaying the loan.

A comparison with the previous year is impossible. The accounts merely state

that Cameron Hall made a profit of £5.4m in the four months to June 1999. But it is clear that the crisis is growing and explains why it has been forced to sell some of its remaining assets.

In March, 3,000 acres of land at Wynyard Hall were sold for £10m. A golf course development has also gone. Debts have fallen to £11m, but it is not clear what assets now remain after the disposals.

This is in stark contrast to the former fortunes of 'Mr Newcastle'. A miner's son, Sir John not only saved a famous football-club, but was the driving force behind business life in the North East.

And Wynyard Hall was to be his lasting monument. He envisaged turning the derelict Palladian mansion into the family seat for generations to come.

Sir John, 69, now spends his time in comfortable retirement in Spain, and his son, Douglas, 43, has moved into the mansion. But neither prosperity nor popularity has passed from one generation to the next.

Shares in Newcastle United languish at 22p, valuing it at just £32m. Five years ago the Magpies were worth almost £200m. Meanwhile, Douglas was notoriously caught with Newcastle United chief executive Freddie Shepherd making disparaging remarks in a Spanish brothel about the club's star player, Alan Shearer. And for good measure, he called Geordie women 'dogs'.

But even as Cameron Hall grappled with debts, Douglas continued to enjoy a lavish lifestyle.

His salary soared from £78,000 to £327,000, and £5m of shares in Newcastle United, where he is vice-chairman, was paid into the executive-pension fund. In addition, he bought five cars from Cameron Hall, which made a loss on the deal of £58,000. The company bought back another vehicle from him for £200,000.

In the directors' report accompanying the accounts, Douglas tries to put a gloss on the crisis, stating: 'The directors reviewed the company's strategy, particularly in relation to its high gearing [debts].

'As a result, and considering the general poor market conditions for property development, they decided to embark on a programme of reducing borrowings by discreetly marketing properties rather than holding them for development.'

The statement is at odds with claims by the company's spokesman that the decision to sell Wynyard Hall was taken because Douglas wanted to move closer to Newcastle United's St James' Park ground.