Damian Griffiths has beat his relatives to the punch, declaring personal bankruptcy with $3.3 million owing to creditors

WITH news that hospitality guru Damian Griffiths has declared personal bankruptcy, with $3.3 million owing to unsecured creditors alone, come revelations of his lavish spending on property in Paris and New York.

Damian Griffiths declared personal bankruptcy last week. Photo Mark Cranitch.

GONE BUST

DAMIAN Griffiths beat his relatives to the punch, declaring personal bankruptcy last week with $3.3 million owing to unsecured creditors alone.

The failed Brisbane hospitality entrepreneur appointed Worrells senior gun Raj Khatri as his trustee on March 19.

That effectively headed off a bid by his Toowoomba-based aunt and cousin, who had sought to bankrupt Griffiths at an April 4 hearing in the Federal Circuit Court in Brisbane.

They had previously won court orders in December to recover more than $550,000 owing from him for the balance of a 2014 loan.

Other Griffiths family members are owed nearly $968,000 from outstanding loans, while the tax man is of out of pocket to the tune of $1 million.

THE HIGH LIFE

It must have been fun while it lasted.

City Beat has obtained a copy of the Griffiths’ statement of affairs, which reveals he amassed big debts buying four apartments in Paris and New York City.

The report shows he paid 350,000 euros ($560,000) for a Paris flat in 2008 and then coughed up another 210,000 euros ($336,000) for the neighbouring unit in 2010.

Illustration of Damian Griffiths by Brett Lethbridge.

The properties, now collectively valued at nearly 900,000 euros ($1.44 million), are worth less than the mortgages held by secured creditors of 1.23 million euros ($1.96 million).

Intriguingly, among the lenders, is a Dalby relative believed to be his father, who has a third mortgage worth 672,000 euros ($1.07 million) that was only secured in January.

That deal, of course, was done when it was already blindingly obvious that the sprawling Griffiths empire was rapidly going down in flames.

Griffiths also acknowledged that he used to own two apartments worth $US1.7 million ($2.2 million) in New York City’s trendy Greenwich Village.

The heavily-mortgaged units were sold in 2015 and 2016, with Griffiths saying he walked away with a net profit of $US607,872 ($786,000).

HOLEY MESS

Meanwhile, back in Brisbane, it’s emerged that Griffiths’ flagship Doughnut Time chain crashed owing just shy of $3 million.

That doesn’t include the money owed to more than 300 employees who lost their jobs across the country, according to an initial report just released by liquidator Michael Caspaney.

The outlook for more than 130 unsecured creditors is “hopeless’’ and they will claw nothing back from the smoking ruins, Caspaney told your diarist yesterday.

Caspany was appointed liquidator on March 9 over eight Donut Time companies, as well as Mr Fitz’s Finest Ice Cream.

He plans to continue sifting through the wreckage over the next three months, looking at employee claims and chasing up landlords in 23 locations to determine which assets can be sold.

Ahead of his final report, Caspaney will also be poring over the complex movement of money in the Griffiths empire, which used to include the Les Bubbles bistro, Limes Hotel and the Alfred & Constance bar.

“It looks as if Doughnut Time moneys have been used to pay secured creditors in other Griffiths companies,’’ he told us.

If so, that sounds remarkably similar to what happened inside Griffiths’ company Bubbles Bar & Bistro, which crashed in December with debts of $1.32 million.

The liquidators of that entity found related party debts exceeded $2 million and there were “numerous intercompany loans’’ from other Griffiths venues. They also alleged that it may have been insolvent as early as late 2015.

Griffiths did not respond to calls and emails seeking comment on Monday.