Stone’s Throw, Bloody Mary Group ‘insolvent trading’ revealed by liquidators

Creditors of a well-known bar and restaurant in Norwood are unlikely to recover their debts despite claims the venue traded insolvent for more than two years before its collapse.

Norwood bar and restaurant Stone’s Throw was likely to have been trading insolvent for more than two years before its recent financial collapse, liquidators have revealed.

The venue’s owners blamed COVID-19 and stalled lease negotiations for the company’s demise in October, when liquidator Andrew Langshaw from DuncanPowell was appointed.

However in his latest report to creditors, issued last month, Mr Langshaw claims debts were mounting well before the onset of the pandemic.

“My investigations indicate that the company’s financial difficulties have been ongoing for a period of time, and pre-date the COVID-19 restrictions,” the report says.

“From at least mid-2018 the company was unable to pay its ATO debt as and when it fell due, and in late 2018 both a statutory demand and garnishee notice were issued by the ATO in relation to outstanding debts.

“An exact date of insolvency has not been determined, however from my investigations it would appear the date of insolvency would be from at least mid-2018.”

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Stone's Throw prior to its closure. Photo: Nick Clayton

Stone’s Throw incurred trading losses of more than $280,000 in the 2019 financial year, rising to more than $400,000 in 2020.

Under the Corporations Act, directors can be held personally liable for company debts incurred while trading insolvent. They can also face civil penalties of up to $200,000 and criminal penalties of up to five years in jail.

According to Mr Langshaw’s report, unsecured creditors of Stone’s Throw, who are owed $1.18m, are unlikely to receive a dividend from the winding up process.

A potential insolvent trading claim is unlikely to recover funds for creditors given the company’s sole director, Matthew Mitchell, was declared bankrupt shortly after the company fell into liquidation.

“From my preliminary investigations it is presently uncertain whether any recovery would be achievable if an insolvent trading claim was successfully pursued, noting that Mr Mitchell is bankrupt,” Mr Langshaw’s reports states.

Stone’s Throw is the latest in a string of failed ventures run by The Bloody Mary Group.

Since 2018, the hospitality group has overseen the financial collapse of venues including The Archer in North Adelaide, the Kincraig Hotel in Naracoorte and Old Friend in the CBD, all of which have since reopened under new management.

Having relied on alcohol rebates and administration and consulting income drawn from its venues, the company was forced into liquidation on the same day as Stone’s Throw’s collapse.

According to Mr Langshaw’s report to creditors of The Bloody Mary Group, the company was likely to have been trading insolvent since late 2018, around the time The Archer became the first domino to fall within the group’s hospitality portfolio.

CBD pub Saracens Head, which was formerly managed by The Bloody Mary Group, continues to trade and is currently on the market.

Saracens Head is currently on the market.

Last year the Supreme Court ordered Mr Mitchell and business partner Brett Viney to pay $383,000 after they concealed lucrative deals with major breweries from their then-business partners Michael and Nicholas Crouch.

The court found the pair did not disclose the deals – negotiated with Carlton and United Breweries (CUB), Asahi and Coopers – for beer taps at Prospect’s Windmill Hotel, which they later sold for about $425,000 less than they originally paid.

Mr Mitchell has been contacted for comment.