One of the lenders to heavily indebted pub baron Jon Adgemis is attempting to sell another of his properties, a 19-room boutique hotel in Sydney’s Darlinghurst, to recoup losses, despite talks about a fresh refinancing led by Deutsche Bank.

The move by David Lyall’s Millbrook Group, a property finance firm, to sell the 1850s Georgian-style hotel, Manor House, demonstrates the fragility of Mr Adgemis’ hospitality empire. The auction date has been set for May 22, but Gemi, another major lender to the former KPMG dealmaker, is trying to halt the sale.