Bottom of the barrel: How pub baron Jon Adgemis’ high life has come to an end
Days after telling allies he’d ‘never felt better’, pub empire aspirant Jon Adgemis has surrendered to bankruptcy while living in a $60,000-a-month penthouse.
Jon Angelo George Adgemis was about to go broke, but there were no signs of distress last Friday when the businessman was spotted out and about in Sydney’s Bondi and Double Bay.
The man who wanted to be a pub king was hosing down suggestions his shrunken empire was under threat. Adgemis was heard telling his closest allies he’d “never felt better”, despite the pressure being heaped on him by creditors.
By Tuesday he had lost control of his last five venues and, by Thursday, he pre-empted the inevitable and was resigned to bankruptcy.
The Greek-Australian who made a name for himself as a KPMG deal-maker was still living large in his $60,000-a-month penthouse owned by billionaire friend Will Vicars.
Adgemis’ world was turned upside down when lenders, who had stuck with him, pulled their support.
Instead of allowing the Australian Taxation Office to make him bankrupt at a hearing on Friday, Adgemis pulled the pin on his own fate by announcing he would voluntarily surrender.
This move blindsided some of his biggest supporters; one lender who ploughed millions of dollars into backing Adgemis only discovered his bankruptcy when informed by The Australian mid-holiday.
Adgemis had aspired to join the pantheon of pub greats, the likes of Merivale’s Justin Hemmes and the Laundy clan who are among the The Australian’s Richest 250 list.
But he tried to supercharge his own rise, funded by rivers of private credit financing looking for a home.
Instead of a bank bust, Adgemis’ collapse looks set to deliver a $1.8bn upset to the private credit establishment which has stepped into a section of the property market vacated by banks since the global financial crisis.
Some of these have already peeled off pubs from Adgemis, including American private lender Muzinich which seized five sites in September last year. Muzinich, which claims debts of $126m against Adgemis, has repeatedly tried to sell those pubs but has failed to secure offers that would enable it to cleanly exit.
Deutsche Bank and Gemi Investments, which are owed $234.2m and $395m respectively, had stuck with Adgemis seemingly to the end. This included in his recent battle with Richard Gazal, who had been seeking to make him bankrupt over $26m.
Adgemis leaned on his mother and sister to provide $3m delivering an expected return of 0.15c in the dollar to his creditors.
WLP Restructuring, acting as his trustees, had told creditors the deal was better than a potential bankruptcy.
Despite a flashy lifestyle featuring fast cars and a taste for fancy watches, Adgemis told his trustees he had just $3.79 in savings, some art and assets. This was despite ploughing millions of dollars into Oh, Canada in which his then-girlfriend Megan MacKenzie played a minor role alongside Richard Gere and Uma Thurman.
Adgemis had $9m in assets, plus $545,000 in luxury cars: a 2015 Range Rover plus two financed cars – a 2021 Mercedes-Benz G63 AMG and a 2022 Range Rover.
On Tuesday, Deutsche Bank and Gemi appointed McGrathNicol as receiver to the remaining five pubs under his control, and KordaMentha as administrator, sweeping in to seize Public Hospitality Group, the key company holding his dream together.
Even Adgemis was shocked when his lenders pulled the plug, telling supporters last week he still had fight in him to finish three key projects and stave off financial ruin.
Secured lenders to Adgemis’ pubs will retain their control of the venues.
Deutsche Bank and Gemi plan to sell the Empire Hotel in Annandale as well as the Hotel Diplomat in Potts Point immediately. A failure to complete a sale of the Empire Hotel was a key factor in the blow-up.
They plan to sell the remaining venues too, but only after work is completed at the Exchange in Balmain, Claridge House in Darlinghurst, and the South Bondi Hotel.
Adgemis’ strategy struck deals with high-profile chefs including Guy Grossi and Karen Martini. But his venues often lacked gaming licences or required extensive renovations.
To fund this, Adgemis borrowed from lenders using at-completion valuations or as though the work had already been done. That proved to be optimistic.
A report into Adgemis by his bankruptcy trustees, prepared as he attempted to woo creditors, revealed he relied on cash out of his teetering business empire and used the money to fund a lavish lifestyle.
This includes $2.4m allocated to paying the loans on his 95-foot yacht Hiilani, once owned by child star Shirley Temple. Adgemis often retreated to the yacht to escape the crisis gripping his pub empire.
The yacht has since been sold after Commonwealth Bank seized and repaired it.
A further $15m was drawn either as cash or loans. Of this nearly $10m was used to pay Gazal, the son of the late rag trader Joe Gazal.
Adgemis’ venues were squeezed as diners and drinkers dried up in the face of higher interest rates, with his valuations slashed and costs surging.
He tried to avert disaster and even offered to sell his empire to Hemmes’ Merivale at one point.
His debts will be wiped by the bankruptcy process. But that does not end his ordeal.
The ATO, which has been monitoring Adgemis for years, has ramped up its advocacy.
ERA lawyer Blake O’Neill, acting for BRI Ferrier, told a previous creditors’ meeting there were concerns about a significant improper GST claim “by the group at large” that may reach the “tens if not the hundreds of millions of dollars” – alluding to what has been described in liquidators’ correspondence as a potential $300m tax bill. Mr Adgemis denies these allegations.
The Australian is not suggesting Mr Adgemis has committed fraud, only that liquidators allege concerns over GST refunds.
Mr Adgemis is expected to face a grilling in the Federal Court as liquidators order public examinations of his companies.
This will be a world apart from the glossy presentations shopped around to investors when Adgemis touted plans to float Public Hospitality Group on the ASX for $470m.
In 2022 Adgemis was riding high, having attracted former Crown boss Peter Crinis to Public Hospitality Group.
Adgemis had attracted the backing of Thorney’s Alex Waislitz, who personally ploughed $7m into a Gleneagle Securities syndicate backing his pubs.
But Waislitz has written off the investments, marking them down to zero. Many others will do the same.
Originally published as Bottom of the barrel: How pub baron Jon Adgemis’ high life has come to an end
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