Creditors of Melbourne’s iconic seafood venue The Lobster Cave have been warned they are unlikely to recover any of the millions owed, as efforts to find a buyer for the collapsed business falter.
Administrator Stephen Dixon of Hamilton Murphy Advisory told The Herald Sun that unsecured creditors, owed over $2.8 million, are likely to receive no return if the company is liquidated.
The Beaumaris restaurant, which entered administration in May, owes a total of $4.2 million, including more than $500,000 to employees.
It also went under with over $1.3 million in unredeemed dining vouchers, and the Australian Taxation Office has lodged a claim of $1.6 million – far higher than the $183,929 disclosed by founder Vasilios Fergadiotis, better known as Bill Ferg.
Despite running the restaurant for nearly four decades, Mr Ferg has failed to present a viable rescue deal, and a sales campaign has yielded just one expression of interest with no formal offer.
Mr Dixon is now seeking more time from creditors to secure a buyer, though he has warned that “the only option I am able to recommend to creditors is the liquidation of the company” if a deal is not secured.
Mr Ferg, currently undergoing personal bankruptcy proceedings, is unable to repay the $1.9 million loaned to him by the business “in lieu of wages.”
Mr Dixon’s preliminary findings suggest The Lobster Cave may have been trading while insolvent since at least June 2022, though he says a legal challenge may be “uncommercial” to pursue.
The administrator blamed the collapse on rising costs, poor financial management, and market resistance to price increases.
Source: The Herald Sun
