An arm of a major hospitality business has quietly collapsed into liquidation, impacting nearly 250 staff members and a handful of other creditors.
Melbourne-based Legacy Hospitality Group Pty Ltd went into voluntary liquidation earlier this month.
Andrew Knight and Sebastian Hams of insolvency firm KordaMentha have been appointed as liquidators.
“The entity we’ve been appointed (to) is one entity in the broader Legacy group,” Mr Knight told news.com.au.
The Legacy group is spearheaded by Benny Avramides, a well-known figure in Australia’s catering scene.
He has launched a number of hospitality venues across Melbourne.
Those include his flagship catering service Tommy Collins and other more casual bar and dining experiences including Hamptons Bakery, Ladybird Cakes and the Rumour Has It cafe.
None of these businesses have been impacted by the collapse of Legacy Hospitality Group.
According to a circular sent to creditors last week, Legacy Hospitality Group owes $1.725 million in total to 258 creditors.
There are also 241 ex-staff owed superannuation ranging from as little as $11 to as high as $4500.
In total, staff are owed $170,000. There are government schemes in place for unpaid wages if a company goes under, but this does not yet extend to recovering unpaid superannuation so staff are likely to miss out.
Legacy Hospitality Group had ceased trading in July and there were no staff left by the time liquidators took over.
Of the company’s liabilities, the largest chunk is owed to the Australian Taxation Office, sitting at $1.58 million.
Other government bodies are also owed money in the wake of the company’s collapse, including the Australian Securities and Investments Commission (ASIC), the State Revenue Office and the Fair Entitlements Guarantee scheme.
They are all owed unknown amounts.
It’s estimated that Legacy Hospitality Group has around $99,000 worth of assets.
“It’s a really tough time for our industry and we’re working through this with the team at KordaMentha to remain compliant and ensure our staff are looked after and paid their entitlements,” Mr Avramides told news.com.au.
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It comes as a number of businesses in the hospitality sector have collapsed amid the economic downturn in the wake of the Covid-19 pandemic.
The hospitality scene across Australia has been gutted in a post-pandemic world as the cost of living crisis rages, causing many cafes and restaurants to go bust.
Earlier this year, news.com.au reported that Sydney restaurant Little Viet Kitchen, based in Manly in the city’s northern beaches, was court-ordered into liquidation over unpaid energy debts.
Two Hog’s Breath cafes in NSW also entered into liquidation in April.
National restaurant chain Sushi Bay also collapsed, with its last remaining Sydney, Darwin and Canberra branches ordered to shut down, amid allegations that workers had been underpaid $650,000 over a number of years.
In March, a popular bar and burger joint in Melbourne’s inner city, The Beer & Burger Bar, went into voluntary liquidation owing around $500,000 to 10 unsecured creditors.
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Also in March, Sydney’s Jellyfish Cafe, in the northern beaches, which specialised in seafood dishes and brunch favourites, went into liquidation after nearly two decades of operation.
In June, controversial restaurant chain Karen’s Diner went into liquidation with $4.3 million worth of debt.
alex.turner-cohen@news.com.au
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