Calombaris investor expects to lose money

A director of celebrity chef George Calombaris' troubled restaurant empire insists he expects no financial gain from placing the business into voluntary administration.

Radek Sali also stressed Made Establishment Group's directors did everything in their power to prevent it going into administration.

Twelve of Calombaris' Melbourne restaurants and venues stopped trading immediately after KordaMentha were appointed as administrators on Monday, with about 400 workers losing their jobs.

The decision came after it emerged last year Made Establishment staff were back-paid $7.8 million in wages and superannuation in 2017.

The Melbourne-based company was fined $200,000 by the Fair Work Ombudsman in July over the underpayments.

Mr Sali, the former boss of Australian vitamins marker Swisse Wellness, has highlighted that Fair Work's investigation into the underpayment found no indication it was intentional.

It was discovered after Mr Sali, the chairman of investment firm Light Warrior, bought into the business.

But the venues failed to recover from the incident, he said.

"The reality is the hit each of the businesses took following Fair Work's handing down of the enforceable undertaking, two years after we repaid staff, was irreparable," he said in a statement on Friday.

Mr Sali is expecting to receive nothing out of KordaMentha's work.

"It is our expectation that we will receive zero cents in the dollar from the administration process."

The past few weeks have been "some of the saddest and most challenging we have experienced in our time in doing business", Mr Sali said.

"We did everything in our power to try and avoid this result," he said.

"I am really sorry that we were not successful."

All staff have been paid up to date, will receive their entitlements and be redeployed into other jobs quickly wherever possible, he said.

He has also made an appeal for people to "show empathy and respect".

"Since considering an administration process, the care and welfare of our team has been the No.1 priority; we now ask the same from the Australian media and general public," he said.

The only part of Made Establishment excluded from administration is a chain of four Yo-Chi outlets.

KordaMentha will spend about a month preparing a report on Made Establishment, but creditors will meet for the first time next Thursday.

Dozens of people have already expressed interest in buying the businesses, with the fit-out of the restaurants, their branding if desired, and the ability to use their locations up for sale.

The administrators are closing in on making deals with some interested parties.

Australian Securities and Investments Commission records show Calombaris was a director at Made until May 2018.

The five current shareholders include Made Establishment Pty Ltd and George C Pty Ltd.

Austrlaian Associated PressBack to Breaking News

  • Print this page
  • Copy Link