Espresso Room Sydney, Canberra: Michael Rose firm hit by coronavirus
A coffee chain has been ‘broken’ by COVID-19 with cafes forced to close and more than $1.7million owed. There are now fears for more cafes as the global pandemic lashes the economy.
Canberra Star
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The coronavirus pandemic has “broken” an already struggling boutique cafe chain leaving behind a multimillion-dollar debt.
The six companies behind Espresso Room owe a combined $1.7 million.
Two of the companies, MTERT and MTERW, were liquidated on March 31 and are in the process of being wound up.
The remaining four – Falcon Rising, MTERCC, Peregrine Coffee and Sustainable Coffee – went into voluntary administration on April 2 and are set for the same fate as the other two when creditors meet for the second time on May 19.
The Circular Quay cafe in Gateway shut some time ago followed in recent weeks by the Canberra-based Espresso Room sites at Westfield Woden and the Tuggeranong Hyperdome.
A third cafe at the Canberra Centre called GreenHouse Coffee and Co which Mr Rose established has changed hands.
Director Michael Rose is still operating an Espresso Room which has a long-term contract at the Australian Defence Force’s Russell Offices and Wildflour Artisan Bakery and Cafe Fyshwick, both of which are part of completely separate companies and continue to trade.
They are not part of the insolvency proceedings.
It is understood most staff from the closed cafes have been transferred.
Administrator John Morgan of BCR Advisory said he would be handing down a report at the May 19 meeting recommending the remaining companies (Falcon Rising, MTERCC, Peregrine Coffee and Sustainable Coffee) are made insolvent.
“Coronavirus was the straw that broke the camel’s back,” Mr Morgan said.
“They were already struggling beforehand but once coronavirus came they couldn’t survive.”
Mr Morgan said there wasn’t much to work with when it came to repaying debt
“The assets are very few because most of it was all fittings and fixtures so the landlord takes it.
“The debts are mainly to the Australian Taxation Office, landlords and a few third party investors. The number of trade creditors is very small.”
On March 22 the embattled cafe posted a plea to its 14,000 Facebook followers along with a screenshot of Prime Minister Scott Morrison delivering an address on COVID-19.
“We now have new rules as stated tonight by our PM. We need to serve takeaway only over the coming weeks. We ask our customers to stay positive and thank you all for the ongoing support,” the post read.
Mr Rose had not responded by the time of publication.