George Calombaris’ food empire collapse leaves creditors $22.3m out of pocket
George Calombaris’ monumental empire collapse shook the food industry to its core. Now, the full financial damage has been revealed — including just how much was left in the bank when creditors finally swooped in.
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George Calombaris’ now-defunct restaurant empire left secured creditors out of pocket by $22.3 million after it collapsed following an explosive wage theft scandal.
The celebrity chef’s full woes came to light in administrative documents which showed there was a scant $389 left in the MAdE company bank account when it shut down earlier this month.
In addition to these woes, the businesses lender, the Commonwealth Bank, is owed a whopping $8.8m.
A first meeting of creditors last week heard that the Commonwealth Bank will get about $1 million back.
A slew of documents lodged with the corporate regulator by MAdE — now being looked at by administrators — shows what looks like a tax debt of more than $700,000 as well.
The “Elektra Unit Trust” is indicated to owe $225,000 to an Australian Tax Office plan.
Another business “HR Brunswick” appears to owe $164,000, while another business “HH Williamstown” appears to owe $163,000. “HR Kew” appears to owe the ATO $226,000.
The documents also show the names of hundreds of smaller suppliers caught up in the collapse.
While many are owed small amounts of not more than $1000, others such as food suppliers seem to be owed tens of thousands from a number of restaurants.
Fresh Generation Vegetables is said to be owed $18,000 from Elektra, $15,000 from the former Crofter and $13,000 from Hotel Argentina in Williamstown.
Poultry N More is said to be owed $15,000 from Elektra, $7000 from Crofter, and $6,800 from Hotel Argentina.
Meanwhile, Richlister Radek Sali, who kept the business alive by ploughing in his own money, also has businesses that are owed $13.7m, according to administrator documents.
But Mr Sali has already said he did not expect to get anything from any administration or liquidation.
Mr Sali has wealth estimated about $390m and it was executives he hired who discovered MAdE’s staff underpayment problems when he brought into the company in late 2016.
The figures are early estimates based on the company’s own figures.
The administrator will have final figures in its March 10 report.
The administrator’s report shows MAdE Establishment had bank accounts left over but no motor vehicles, plant or equipment, inventory, property or other assets.
The 3pm administrator’s meeting held last Thursday took place at KordaMentha’s Rialto Tower headquarters and was attended by about 80 people.
It heard administrator KordaMentha say its was to recommend the business be put into liquidation at a meeting on March 17.
More than 200 smaller unsecured creditors — such as suppliers and tradespeople — are understood to have a series of smaller debts owed to them which may struggle to be repaid.
They were not revealed in the document lodged with the corporate regulator.
Calombaris’ MAdE Establishment business appointed restructuring expert KordaMentha on February 10 as it collapsed into voluntary administration.
Administrators had been working feverishly to find new owners for the 12 venues and save some of the 400 jobs the empire supported.
KordaMentha has now sold five restaurant leases but does not expect to make any more sales of the remaining seven. It will recommend creditors vote to liquidate the company at a meeting on March 17.
The meeting was also told employees were owed $400,000 in remaining leave payments. Other remaining redundancy entitlements could take this to over $1m.
Upon liquidation, KordaMentha will assist former employees to access the Fair Entitlements Guarantee scheme for any unpaid entitlements. It is understood to be confident they will get entitlements owed to them.
The MAdE business already paid outstanding wages and superannuation the day the company was shut.
“We do not currently hold offers capable of acceptance for the remaining seven venues as we have run out of time,” administrator Craig Shepard said last week.
“We encourage any further expressions of interest to be made direct to the relevant landlords.”
The owners of late night souvlaki destination Stalactites have been revealed as the saviour of two of George Calombaris’ Jimmy Grants restaurants.
Sources confirmed the owners are the prospective owners of the duo of Jimmy Grants stores – pending landlord approval.
The Jimmy Grants Emporium site and the original shop in Fitzroy are the stores likely to be sold to the owners of Lonsdale Street’s Stalactites and Elizabeth Street’s Hella Good. It is reported the Jimmy Grants stores will trade under the Hella Good name.
Meanwhile, it was also revealed one of Melbourne’s top American-style barbecue experts will take over George Calombaris’s original Hellenic Republic site.
MORE
FAMED SOUVLAKI JOINT SNAPS UP TWO CALOMBARIS RESTAURANTS
D-DAY ARRIVES FOR SALE OF CALOMBARIS’ EMPIRE
CHIN CHIN OWNER JUMPS TO CALOMBARIS’ DEFENCE
The rebranded Crofter Dining site has been taken over by husband-and-wife team Andrew and Pam Kavanagh, who run barbecue-focused The Que Club in Fitzroy North.
Andrew Kavanagh confirmed to the Herald Sun the business would be relocating to the Crofter site, possibly with a soft opening in mid-March, and the Que Club would expand its dinner hours.
Originally published as George Calombaris’ food empire collapse leaves creditors $22.3m out of pocket
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