Sydney pub empire in freefall as administrators seize control

A protracted quality implicit the merchantability of the Empire Hotel successful Annandale has precipitated the illness of Sydney hospitality fig Jon Adgemis’s once-expansive pub portfolio.

It was reported successful The Australian, that administrators Korda Mentha and receivers McGrath Nicol person taken power of 5 of Adgemis’ venues aft lenders withdrew support, marking a melodramatic unravelling of the Public Hospitality Group. At its height, the radical operated 22 venues crossed Sydney and Melbourne, mostly financed done backstage credit. Now, Adgemis faces not lone the nonaccomplishment of his hospitality empire but besides looming idiosyncratic bankruptcy that could transcend $1.8 billion.

According to The Australian’s sources accidental tensions implicit the Empire Hotel merchantability exhausted creditors’ patience. Lenders, including Deutsche Bank and GEMI Investments — which together invested much than $770 cardinal — had pressed Adgemis to divest the property. However, a projected woody collapsed, prompting decisive action.

The 5 venues present under receivership see the Empire Hotel (Annandale), Hotel Diplomat (Potts Point), Claridge House (Darlinghurst), The Exchange Hotel (Balmain), and the South Bondi Hotel (formerly Noah’s Backpackers). Administrators program to implicit unfinished renovations astatine these sites earlier moving to merchantability them.

Construction work is ongoing astatine respective properties, though advancement has been hampered by disputes with contractors and lenders. Meanwhile, Adgemis has continued overseeing developments while maintaining a costly idiosyncratic lifestyle, including paying astir $60,000 a period for a Bondi penthouse — a substance flagged by the Australian Taxation Office arsenic a imaginable interest for bankruptcy trustees.

McGrath Nicol confirmed it would proceed operating the Empire Hotel and Hotel Diplomat during the process and is preparing a income strategy for some venues, describing them arsenic “iconic” and apt to pull strong interest.

Separately, the ATO has stepped into Adgemis’ bankruptcy proceedings arsenic pb petitioner, citing outstanding idiosyncratic tax liabilities exceeding $150 cardinal and further institution tax debts perchance topping $300 million. A Federal Court proceeding is scheduled for October 3 to determine connected his bankruptcy.

Efforts by Adgemis to stave disconnected bankruptcy — including a connection to connection creditors conscionable 15 cents successful the dollar — person failed to summation traction. With creditors present losing confidence, the last chapters of Public Hospitality Group’s illness look to beryllium underway.

The illness of Jon Adgemis’s pub empire was triggered by the long-running Empire Hotel quality successful Annandale. Photo: Facebook