What happened to all the food from George Calombaris’ empire?
As administrators scrambled to find buyers for several of George Calombaris’s restaurants, a world-famous sporting event has been revealed as owing money to the celebrity chef’s culinary business.
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Thousands of dollars worth of food from George Calombaris’ padlocked food empire was donated to charity rather than being left to rot, it can be revealed.
At the same time administrators also revealed it had been chasing all debts owed to the now collapsed business — including major event the Australian Open — as it sought cash for creditors.
Calombaris’ MAdE Establishment business — with its 14 restaurants — fell into administration on February 10, appointing restructuring expert KordaMentha.
Minutes from the first meeting of creditors — held on February 25 — reveal efforts to get joy for creditors who include the Australian Taxation Office, the Commonwealth Bank and hundreds of suppliers and trades people.
KordaMentha’s Craig Shepard told the meeting he had been corresponding with all debtors.
“The chairperson noted that the Australian Open was a significant debtor of two of the companies within the group,” the minutes show.
“(KordaMentha) requested all debtor amounts be paid in full into Administrator bank accounts.”
Both Hellenic Republic and Gazi were at the Australian Open this year.
The Australian Open collects money for its on-site restaurant partners and then distributes it later.
Mr Shepard also shed light on what happened to the substantial amounts of food left when restaurants were promptly shut on February 9.
“The chairperson advised that some perishable stock had been donated and some had been collected by suppliers,” the minutes say.
The minutes also reveal the convoluted structure with 22 companies that made up the restaurant empire.
It heard that of the “13 employing entities” there were 346 employees and 102 of these were permanent — both full time and part time — plus 244 casual staff.
The meeting heard there would be employment opportunities for some of these people in some of the venues that had taken up leases.
“Some of the purchasers of the sold venues would correspond with employees of the group in due course in respect of employment opportunities,” minutes said.
The meeting was also told employees were owed $400,000 in remaining leave payments. Other remaining redundancy entitlements could take this to more than $1 million.
But it was likely the taxpayer would have to cover these entitlements.
“It is likely that employees will need to rely on the Fair Entitlements Guarentee (“FEG”) for payment of outstanding entitlements,” minutes say.
“(Administrator) noted that employees that are not Australian permanent residents are not eligible to make a claim with FEG”.
The MAdE business already paid outstanding wages and superannuation the day the company was shut.
The meeting heard a report to creditors expected to be delivered on March 10 and a second meeting with creditors scheduled for March 17.
The administrators said they expect the company to be placed into liquidation after that second meeting of creditors.
The Australian Taxation Office — which looks to be owed hundreds of thousands of dollars — asked the meeting about previous work KordaMentha had done for Made Establishment investor Radek Sali’s investment company Light Warrior.
The ATO also asked if MAdE had traded while insolvent.
“The chairperson explained that he was engaged by Light Warrior (a related entity of the major shareholders and secured creditor of the group) to review the group and form a view on the likely consequences for creditors if the venues were to cease trading. The chairperson advised that there was no conclusion drawn on the solvency of the group as a part of the investigative accountant engagement,” minutes reveal.
The Australian Taxation Office also asked if any “recommendations were made to the director in respect of provisions for safe harbour as part of the investigative accountant review”.
But the meeting heard KordaMentha say it had never been engaged to provide safe harbour advice.
According to the ATO, under the safe harbour provisions, a client will not be liable to certain administrative penalties.
The administrators said they would look at the company’s convoluted structure, including major owner, Radek Sali, being a director, shareholder and a lender to the group. It will also look at whether there were any preferential payments made to suppliers.
It has previously been revealed that while the Commonwealth Bank, is owed a whopping $8.8m it will get about $1 million back.
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.
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Administrators had been working feverishly to find new owners for the 12 venues and save some of the jobs the empire supported.
KordaMentha has now sold five restaurant leases but does not expect to make any more sales of the remaining seven.