Leigh McPherson lost $8m after failed investment in Rose Bay’s Regatta restaurant

Mining magnate Leigh McPherson is in a legal battle after his famed Regatta restaurant went under — losing $8m and sparking a brawl with one of the Sydney’s richest families.

He’s the publicity-shy mining magnate who rode into Sydney and spent a fortune on luxury real estate and even a waterside restaurant.

But Leigh McPherson’s purchase of Rose Bay’s Regatta restaurant has resulted in him losing almost $8 million in six years and sparked a brawl between him and one of the city’s richest families over millions more in alleged unpaid rent.

From humble beginnings, the South Australian-born 61-year-old and his extended family earned their vast wealth through the Hunter Valley coal industries. Sources said Mr McPherson now spends most of his time negotiating investment deals in Europe.

Leigh McPherson (front right) celebrating his 60th birthday with family at Paris’ famed Les 100 de Taillevent restaurant in 2019. Picture: Instagram

Mr McPherson made a splash in 2011 when he purchased a luxury $5 million Potts Point apartment, which enjoys panoramic Harbour and CBD views. Sources said he intended to keep it as a local bolthole when he was in town.

In 2014, he entrenched himself among the city’s wealthy elite by bankrolling the purchase of the famed Regatta restaurant with his twin brother Brendan.

Located in one of Sydney’s most sought-after waterfront locations, Regatta attracted high end patrons like Princess Mary.

No expense was spared when the McPherson brothers reopened Regatta. The operation boasted rock-star chefs like Damien Pignolet, sommeliers of equal standing and a plush fit-out.

But the gigantic overheads doomed it.

Doomed to fail: Regatta restaurant in Rose Bay.

Even at maximum capacity, the costs — including $18,000 a week in rent — lapped the revenue the eatery could pull in.

In October, it was placed into the hands of receivers with debts eclipsing $11 million, according to documents lodged with corporate regulator ASIC.

Of the $11 million, Mr McPherson was the largest creditor.

This was because one of his other companies, Third Street Investments, had pumped $7.8 million into Regatta since 2014 — first to purchase the restaurant and then keep it afloat.

Three other companies run by Mr McPherson and other family members also injected more than $1 million into Regatta over the period.

Officially, the amounts were listed as loans. But the money is now lost, according to the documents, making it one of the biggest restaurant failures in Sydney’s history.

The documents said the loans from the companies to Regatta were “funds advanced to the company for the purchase of the business, fit-out costs and to cover trading losses.”

Diners at Regatta enjoyed one of the best views in Sydney.

One of the reasons why a portion of his investment will not be recovered is because Mr McPherson elected to have the other creditors — including restaurant staff — paid in full, which accounted for most of the money that administrators recovered, the documents said.

The McPherson brothers declined to comment but issued a statement through a spokeswoman instead.

“We did everything we could but ultimately the rent was too great,” the statement said. “And, despite trying everything, we realised we could not make it work.”

According to the administration documents, the cost to rent the site came to just under $1 million a year.

The issue has sparked a battle between Mr McPherson and the landlord — the Woollahra-based property magnate Denis O’Neil.

Mr O’Neil’s family did not respond to calls.

According to the administration documents, the landlord claims to be owed $2.4 million in “outstanding rent and other costs, including fit-out contributions (on the restaurant).”

They also submitted a claim for $412,000 alleged to be owing from the lease.

The landlord also “has a claim against (Mr McPherson) personally for $376,000”, the documents said.

The dispute is now understood to be in the hands of lawyers.

From left: Denis O'Neil, Brendan McPherson, Neofitos Stavrou and chef Damien Pignoletrock in 2017.

Mr McPherson is contesting how much rent he owed to the O’Neils and claims it has not been paid because the amount should have been reduced during the COVID-19 crisis.

No arrangements were made in the administration process for the landlord to be paid, the document said.

In his dealings with administrators, Mr McPherson also attributed the restaurant failure to “financial losses” and COVID-19 struggles.

This included “losses of $2.2 million for the financial years between 2018 and 2020”, the documents said.

Administrators initially tried to trade out of trouble but realised by the second week — when trading revenue dropped by 21 per cent — that it was a futile exercise and shut the restaurant on November 2.

Another Sydney cafe empire, The Boathouse — which has had its own financial problems recently — is now set open at the site.

Getting ready for a new tenant: the Regatta site this week. Picture: Tim Hunter

The Boathouse group is preparing to take over the Rose Bay site. Picture: Facebook

Despite the failure, sources said Mr McPherson is still an active investor and spends most of his time in Europe, including in France where he celebrated his 60th birthday with family at Paris’ famed Les 100 de Taillevent restaurant.

Mr McPherson and his family are also understood to be experienced in the restaurant game and are silent investors in a number of other ventures.

“They’re smart people who avoid the spotlight and know how to make money,” one source said.

ASIC records show directorships and shareholdings for Mr McPherson have included Minimbar Coal, Newcastle Coal Company, Donaldson Coal and others.

Spectacular views from Leigh McPherson’s luxury Potts Point apartment that he sold in December 2020.

The mansion on Ocean St, Woollahra previously owned by Brendan McPherson before it was sold for $13.5m.

His brothers have similar CVs.

According to property records, Mr McPherson bought a modest property in the Maitland suburb of Lorn in 1995 for just over $121,000.

His most recent property sale demonstrates how far he has risen.

His luxury apartment on Grantham St, Potts Point, sold in December for an undisclosed amount but real estate figures estimate the sale at between $8 million and $11 million.

It is a similar story for his brother, Brendan, who sold a mansion on Ocean St, Woollahra, for $13.5 million, only to take ownership of another in the same suburb.

A deed of company arrangement dealing with how Regatta’s creditors will be paid was adopted in December and is expected to be actioned in February.