Rockhampton Plaza Hotel lessee liquidation estimated to be $1.7 million

New documents for the 161 on George International liquidation have detailed disputes with the landlord who has also refused access for the liquidator to collect equipment owned by the company. See the list of creditors owed a combined $1.7 million.

The restaurant building at the Rockhampton Plaza Hotel.

New documents in the liquidation of the former lessee of the Rockhampton Plaza Hotel have revealed more than $1.7 million is owed to creditors and the hotel property owner James Chang has claimed there is $790,000 in outstanding rent.

Initial investigations from the liquidator have indicated the company failure was due to “ongoing disagreements” with the landlord, Mr Chang, and that the sale of the business may have been an uncommercial transaction due to the state of the property.

JPC Hotel Australia, which traded under 161 on George International, traded from the Rockhampton Plaza Hotel on the city’s highway strip.

The company director is Jhona Leonard.

Rockhampton Plaza Hotel in 2022.

The business opened at the end of 2022, offering accommodation from the seven-storey hotel and a 100-seat Australian-Filipino restaurant under the name Mang Ben Inasal Chargrill Resto & Bar.

The company filed for voluntary liquidation on April 20 2023, with Michael Beck of Worrells Solvency & Forensic Accountants CQ appointed as the liquidator.

Mr Beck filed a statutory report with the Australian Securities and Investments Commission on July 20 that went into detail on the extent and early investigations of the liquidation.

The total amount of money owed to creditors is $1,702,943.

Employees are estimated to be owed $39,525 in wages, superannuation and leave entitlements.

Creditors are owed an estimated $871,869.

Chang Holdings has also claimed it is owed $791,548 and is listed as a secured creditor. James Chang is the sole director of Chang Holdings, the owner of the property.

At the time of the liquidation the company had $16,270 cash at bank.

Mr Beck has written in the report, based on advice from Ms Leonard, the company “began to experience financial difficulty approximately two weeks prior to the liquidation due to legal actions and ongoing disagreements with the landlord (Mr Chang)”.

“It is our understanding there has been ongoing dispute between the director and Chang Holdings Pty Ltd and that Chang Holdings may have used other rooms in the hotel,” Mr Beck wrote later in the report.

Mr Beck states he has conducted a preliminary analysis of the available financial records for the company and it appears the company became insolvent shortly after entering the lease and sale agreement for the hotel.

The purchase price was $600,000 plus $5,000 stock.

There is also an amount of $250,000 for annual rent and $200,000 in leasehold.

According to the report, the landlord (Mr Chang) also received commission on the rent of rooms and was entitled to revenue from the restaurant operation, and also retained rights to occupy two rooms as his permanent residence.

The exit stairs at the rear of the Rockhampton Plaza Hotel building from the back laneway.

Mr Beck further states the property “may not have been compliant with its fire safety obligations at the time the agreement was entered into and as such, the lease / sale of business may have been an uncommercial transaction.”

In February 2023, Mr Chang was ordered at the Rockhampton Magistrates Court to pay more than $44,000 in fines for 16 charges under the Fire and Emergency Services Act 1990.

Mr Beck states when the company acquired the management rights and leases, the “hotel had not operated for some time and required significant repairs and renovation in order to operate”.

“We’ve obtained copies of documents relating to the lease and memorandum of understanding between the lessor and the company which indicate a substantive portion of the required renovation costs were to be borne by the company while the lessor / owner would retain ownership of the property along with various entitlements to revenue and access rights.”

The company suffered a net loss of $22,180 for the financial year ending June 30 2022.

“Internally maintained monthly profit and loss reports identify that the company has incurred monthly losses since commencement of trading and has never operated profitably,” Mr Beck’s notes states.

Ms Leonard has estimated the company had $165,000 in plant and equipment located at the hotel in terms of bar fridges, linen, beds, furniture, airconditioning, solar electricity systems and kitchen fit-out.

Mr Beck has attempted to assess this plant and equipment and Mr Chang has reportedly denied access to the property.

“Despite our attempts, the landlord has prevented access to the premises for us to obtain details of the company’s plant and equipment,” the report states.

Mr Beck states it is unlikely they will be able to realise any income from the plant and equipment.

JPC HOTEL AUSTRALIA CREDITORS

• Australian Taxation Office (insolvency): $2,000
• Australian Taxation Office (super guarantee): $19,403
• Bidfood: $614
• Bishhop Outdoor Advertising: $3,944
• Bromic (rental water equipment): $6,574
• Employsure Law: $3,829
• Ergon Energy: $3,633
• Girlie Anne Ramos: $80,000
• Grant & Simpson Lawyers: $198
• JJ’s Waste & Recycling: $521
• LoTax & Financial Solutions: $88
• PBR Air Refrigeration & Airconditioning: $7,500
• Recon Energy: $6,400
• The Pool Man: $6,140
• Tax Store: $3,421
• Cookers Trust: $885
• The University of Queensland: $9,304
• VIVA Energy Australia: $467
• Wise Goal: $30,099