Restaurant chain owing $23m ceases all operations, 200 staff terminated

Restaurant chain owing $23m ceases all operations, 200 staff terminated
  • PublishedMay 15, 2024

A fine dining restaurant chain which owes $23 million to creditors has ceased trading while all 200 staff have been terminated.

Last month, hospitality business Good Group Australia, which operated a high-end string of steak restaurants and several other Asian venues across three Australian states and territories, went into administration.

Its Botswana Butchery chain sold steak for as much as $500 a piece and had restaurants in Sydney, Melbourne and Canberra with 200 staff between them.

On Tuesday, the company’s appointed administrators, Andrew Sallway and Duncan Clubb of insolvency firm BDO Australia, pulled the plug and closed down all three stores.

“Due to the significant cash losses being incurred in operating the restaurants, the group’s shareholders are no longer able to fund the ongoing trading and restructuring costs,” they said in a statement to news.com.au.

An earlier report from the administrators found that continuing to operate the three steak houses racked up operating losses of $207,000 in the space of just over a month.

Some customers might be left out of pocket from the decision if they had prepaid vouchers or prepaid reservations.

Good Group Australia’s directors have advised that they will provide a full refund or voucher to those customers to dine at the company’s New Zealand restaurants — which continue to trade and are unaffected by the Australian administration proceedings.

Another arm of the business – White and Wong’s, based in Martin Place in Sydney and Chadstone in Melbourne, and Wong Baby in Melbourne’s Chapel St — had already ceased trading.

The company has now ceased all operations. Picture: @botswanabutcherysydney/Instagram

The company has now ceased all operations. Picture: @botswanabutcherysydney/Instagram

Administrators had recommended to creditors that Good Group Australia be placed into liquidation but the company received a 45 day delay to make a decision.

Now they have advised that the directors have proposed a deed of company arrangement (DOCA) which might see creditors receive a return on some of the money owed to them.

In a report to creditors sent out earlier this month, the administrators revealed that Good Group Australia has a whopping $23 million debt hanging over its head.

Of Good Group Australia’s large debt, the Commonwealth Bank is owed $9.7 million, but through secured facilities meaning it will likely get it all back.

A further $4.5 million is owed to other creditors, including landlords, suppliers and employees, while an additional $9.3 million is owed in inter-company loans.

Landlords alone are owed $1.81 million by way of unpaid rent.

In fact, the landlord of the company’s head office in Melbourne evicted the group over failure to pay up before the chain went bust.

These landlords are expected to recover some of their money through security bonds.

Good Group Australia also appears to owe a lot of money to the tax man — about $3.6 million.

However, administrators have not included that debt in the total amount because the tax department has not yet lodged any proof of debt claims.

Staff are owed $523,804 from unpaid annual leave and long service leave entitlements. Workers are also owed a further $92,000 from superannuation that was never paid.

Botswana Butchery and the Wong chain have both gone bust. Picture: @botswanabutcherysydney/Instagram

Botswana Butchery and the Wong chain have both gone bust. Picture: @botswanabutcherysydney/Instagram

The same report also said the Botswana Butchery group appeared to have been insolvent since last September.

It comes as the Canberra arm of Botswana Butchery only launched two months prior to administrators being called in, in January this year.

The White and Wongs and the Wong Baby Chapel arms of the business had been trading at a loss since their inception and money from the New Zealand group had been propping it up a lot, according to the report.

The document also noted that the company’s directors had failed to respond to the administrators’ requests for more information. As a result, they said they plan to alert the financial regulator, ASIC.

The Botswana Butchery chain originated from Queenstown, on New Zealand’s South Island, and all its directors are based in New Zealand.

SOURCE: NEWS.COM

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