Linchpin Group cans OzHarvest charity meal deal as bankruptcy D-Day looms for Jon Adgemis

The financial fate of Jon Adgemis will be decided on Friday, but cracks are showing at the operator of four of his old Sydney venues, the Linchpin Group, which can’t keep OzHarvest fed.

The Empire Hotel in Annandale is one of five venues operated by Linchpin that were previously run by Jon Adgemis’s Public Hospitality Group.

Pubs operator Linchpin Group has ended its OzHarvest philanthropic pact, as the operator of four Sydney venues previously owned by Jon Adgemis is accused by former employees of unpaid entitlements.

OzHarvest confirmed on Tuesday that Linchpin had dumped its deal with the food waste charity in which it pledged $1 for every meal and hotel booking. Linchpin made its last payment to OzHarvest in May, and another payment for the use of the charity’s name is due this quarter.

It comes as former staff at Linchpin told The Australian they have not been paid their redundancy entitlements since they were let go.

The OzHarvest deal was one of several brand moves announced by Linchpin as the hospitality business tried to draw a line publicly under its links with Mr Adgemis, after taking on the running of his hospitality operations amid a clamour by the indebted pub baron’s creditors for their cash back.

Linchpin CEO Terry Soukoulis.

Linchpin operates five venues previously run by Mr Adgemis’s Public Hospitality Group meaning it hires, rosters and supervises the venues independently.

These include the Empire Hotel in Annandale, the Hotel Diplomat, The Lady Hampshire, and the Oxford Tavern in Sydney. A fifth, Puttanesca Osteria, is in Melbourne’s Kew.

These venues are required to pay Linchpin a management fee.

Sydney’s Gazi, previously part of the Linchpin group, is now headed up by celebrity chef ­George Calombaris, who called it quits with the hospitality company in recent weeks.

Linchpin’s fate may yet be decided by a $1.5bn debt doomsday for Mr Adgemis, when creditors will vote a proposal he has offered to square his borrowings for 0.17 of a cent in the dollar. At face value, they stand to lose 99.83 per cent of their loans.

Former Linchpin staff said privately that they were still owed tens of thousands of dollars.

The group has also had trouble making payroll, with staff relaying a message in June that there had been a “delay in receiving funds from our overseas lending partners”. In the June email seen by The Australian, Linchpin chief executive Terry Soukoulis said the group was “actively working with the lenders to expedite the release of funds”.

Days later, four staff from head office were made redundant, and Mr Soukoulis told the Daily Telegraph all roles cut were from the business’s marketing team.

Mr Soukoulis failed to respond to questions from The Australian by Tuesday’s deadline, having replied on Friday that he would “get back to you over the weekend”.

The Australian confirmed that among the casualties was Hannah Parkinson, who headed up Linchpin’s HR and recruitment.

Ms Parkinson came across from Public Hospitality Group.

Ex-KPMG dealmaker Jon Adgemis. He is pictured with Peter Crinis who previously ran the hospitality side of the business. Picture: NewsWire / David Swift

New York private credit lender Muzinich plunged Mr Adgemis’s Public Hospitality Group empire into crisis in September last year, seizing control of five pubs and ­hotels owned by the businessman.

Mr Adgemis, who at his peak controlled more than 22 pubs and hotels across Sydney and ­Melbourne, is now facing financial catastrophe after bankruptcy trustees concluded he was exposed to almost $1.5bn in creditor claims.

In the wake of the blow-up with Muzinich, Mr Adgemis turned to financial backers Gemi Investments and Deutsche Bank to bankroll the renovations at his venues in a bid to bolster the value of his pubs and restore the empire to solid financial footing.

However, Linchpin sources said these works were running massively behind schedule, with dining at the flagship project planned for Bondi’s Noah’s Backpackers now months late.

Linchpin staff and Mr Calombaris sat in on several meetings with Mr Adgemis and his backers. Linchpin is controlled by Mr Soukoulis, former Public Hospitality Group staffer Joanne Sproule and Monaco-based investor Marco Bettelli.

Adgemis loyalist and adviser Damien Hodgkinson quit Linchpin as director on May 8.

Mr Adgemis filed for bankruptcy on June 20 but his record of meetings goes back to last year, when he met with WLP Restructuring on December 4 at the office of Olvera Advisers to discuss “possible insolvency ­options”.

Olvera’s principal is Mr Hodgkinson.

Mr Adgemis has a trio of luxury vehicles and property worth a combined $9.5m, as well as $3.79 in the bank. If he is successful in brokering a deal with creditors, he will be able to remain a company director.

Mr Adgemis’s sister is expected to contribute money from her marriage break-up to the $3m sweetener in the rescue plan he has dangled in front of his creditors. They meet on Friday.

Gemi Investments is owed as much as $395m across 23 different loans to companies linked to Mr Adgemis for which he has provided a personal guarantee, according to the bankruptcy trustees report.

As for OzHarvest, “we’re in their hands as to what is owed”, national brand and communications lead Fiona Nearn said of Linchpin.

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Originally published as Linchpin Group cans OzHarvest charity meal deal as bankruptcy D-Day looms for Jon Adgemis