ACMI chief executive Seb Chan said Karen Martini’s Hero had ‘significant unpaid debt’

ACMI has responded to claims in the wake of Karen Martini’s abrupt restaurant closure, saying it was booted over “significant unpaid debt.”

The news of Hero restaurant’s closure has left Karen Martini and her business partner Michael Gebran “in shock”. Picture: Alex Coppel.

ACMI has responded to claims in the wake of Karen Martini’s abrupt restaurant closure, saying it was booted over “significant unpaid debt.”

Chief executive and director Seb Chan said the museum had ended its agreement with HospitalityM, run by Martini and her business partner Michael Gebran, over a breach of contract.

“This followed ongoing attempts to negotiate with HospitalityM over the past few months,” Mr Chan said.

The response comes as the celebrity chef slammed ACMI, the Australian Centre for the Moving Image, saying her restaurant’s shambolic exit from Federation Square was a “cruel end” to their partnership.

The TV chef told the Herald Sun she was “disappointed” and equally “devastated” after all Hero at ACMI staff were advised they no longer had a job on Monday afternoon.

ACMI director Seb Chan.

“We are devastated by the lack of support. It is such a loss for Federation Square and the city. This part of the city is struggling,” Martini said.

“In this climate, it is hard to believe that ACMI couldn’t match our passion and enthusiasm for good things.”

However Mr Chan, who was appointed as new director mid-last year, said the centre had provided ongoing support to HospitalityM.

“Since Hero opened in November 2020, ACMI has provided ongoing support for HospitalityM — including payment concessions and multiple contract renegotiations — to help Hero in the face of ongoing challenges to the hospitality sector across the city,” he said.

“Unfortunately, HospitalityM has been unable to meet its legal and financial obligations under the agreement and has accrued significant unpaid debt.”

“It would be inappropriate for ACMI to disclose the amounts owing by a commercial operator.”

Karen Martini said she was “disappointed” and “devastated” by the news.

More than 70 employees were reportedly told by art and screen museum workers that they no longer had a job and had six hours to leave the site.

Business owner Michael Gebran learned his fate via an email and letter served to his home at the same time.

Mr Gebran said he was still “in shock” after learning the restaurant he’d run with Martini for almost three years had been booted with no warning.

“They emailed me at 2pm yesterday and had a courier serve a letter to my home, informing me that we had to be out by 8pm, otherwise we would be trespassing,” he said.

“All of our swipe card access was revoked. I had a sous chef on site ringing me in tears saying ‘we have to be out of here’. It was a whirlwind couple of hours,” he said.

Mr Gebran said Hero restaurant wasn’t trading at the time, but was wrapping an event and had staff working at Hero Kiosk.

The company is now seeking legal advice.

After receiving the email from ACMI, Gebran raced to the city to be with his team and begin vacating the building — which included removing art from renowned Australian artist Christina Zimpel.

Security accompanied staff on the site during this process and Gebran said he now “required permission and supervision” from ACMI to be on site to collect the remainder of the belongings.

Hero’s owners began vacating the venue on Monday night.

The art was removed from the walls hours after the news broke.

Mr Gebran runs HospitalityM with Martini and her husband Michael Sapountsis. In 2017/18 they won the tender to be ACMI’s hospitality provider.

The move was part of a $40m revamp of ACMI to drive more guests to the arts and culture museum inside Federation Square.

Both Martini and Gebran said the company had been working with ACMI to devise a strategy to drive revenue and increase visitation to the area, but claims these conversations fell on deaf ears.

On Monday, Mr Gebran said the split was not amicable despite an ACMI press release, sent out at 4pm to media and stakeholders, suggesting so.

“They sent out a press release to the media advising that this was an amicable exit, but we aren’t sure how amicable it is,” he said.

Gebran thanked those who had supported the business over the years.

“To our staff, to our families, to our friends, to my business partner Karen, to our customers: we thank you so much for everything that you’ve done and the support you’ve given us.”

Earlier on Tuesday, the Herald Sun observed empty wine glasses and a bottle opener left on the large communal table at the front of the dining room.

A delivery person, with a crate of milk and cold drinks, seemed confused speaking to an ACMI worker inside the complex in the early hours.

Martini launched the restaurant in the heart of Federation Square in early 2021. Picture: Alex Coppel.

In a statement, an ACMI spokesperson said: “Hero and its associated events management services, operated under licence by Michael Gebran of HospitalityM, together with Karen Martini, will be closing its doors today at ACMI.”

“Since opening in November 2020, Hero has been acknowledged for setting new dining standards at Australian cultural institutions by showcasing Karen Martini’s European-focused, seasonally driven approach to uncomplicated cooking.

“The restaurant quickly became a much-loved fixture of Melbourne’s dining scene and attracted widespread acclaim from both patrons and industry.”

“ACMI would like to thank Michael, Karen and the wider Hero team for their delivery of exceptional dining experiences in the face of ongoing challenges to the hospitality industry since 2020.

When asked on Tuesday, ACMI said it would not be providing any further response on the matter.

Martini has been a figure in Melbourne’s hospitality scene for two decades. Hero was her first CBD venue. Martini became a household name through her role as a TV chef on Channel 7’s Better Homes and Gardens.

ACMI said a new food and drink venue would be announced soon.