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George Calombaris caught in fresh debt scandal as backed yoghurt chain refuses to repay $140,000

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A frozen yoghurt chain backed by George Calombaris has refused to repay a $140,000 debt owed to his collapsed restaurant group which is falling back on the taxpayer to cover outstanding wages, The Daily Telegraph reports.

The knock-back comes despite the taxpayer being called on to cover a $1.32 million employee wage and entitlements bill after the liquidation process failed to raise enough money to cover those costs.

Read More: George Calombaris restaurant empire’s collapse costs taxpayers $1 million

Multimillion-dollar properties owned by Mr Calombaris and his wealthy restaurant backers including former Swisse vitamins boss Radek Sali cannot be targeted to raise funds because the debts are owed by their companies, not the individuals.

Made, which employed 364 staff across a restaurant stable including The Press Club, Hellenic Republic and Jimmy Grants, collapsed in February. Its downfall followed a public backlash to a $7.8 million wages underpayment scandal.

George Calombaris at his Jimmy Grants restaurant at Sydney Central Plaza.

Up-market yoghurt chain Yo-Chi, whose owners include Mr Calombaris and Mr Sali, emerged as the sole Made group restaurant to avoid insolvency. It continues to operate outlets in Hawthorn, Malvern, Carlton and Balaclava.

The latest report from liquidator KordaMentha shows it approached Yo-Chi to collect an outstanding $140,000 debt in April.

Read More: George Calombaris’ restaurants suffered $20 million in financial loss.

“Following correspondence with one of Yo-Chi’s shareholders, the liquidators concluded that it would not be commercial to pursue the outstanding loan balance further as Yo-Chi has minimal cash and recoverable assets,” the KordaMentha report says.

“In addition, Made Establishment’s claim is as an unsecured creditor of Yo-Chi and we are aware of a secured creditor who would rank ahead of Made Establishment’s claim in any formal insolvency process.”

KordaMentha has raised about $820,000 from the liquidation process to date which includes earning $222,000 from an online auction of restaurant equipment and food inventory.

Radek Sali (left) and George Calombaris (right). Photo by Paul Jeffers.

These funds will be directed to CBA – the first ranking secured creditor – with KordaMentha warning other parties owed money not to expect a return.

Among these are Australian Taxation Office, owed $2.3 million, and unsecured creditors such as suppliers and landlords who are owed $1.5 million.

Former Made employees are owed $1.32 million with the overwhelming bulk of this related to annual and long service leave and redundancy and termination entitlements.

KordaMentha has directed them to seek assistance from the Fair Entitlements Guarantee, the government scheme of last resort that covers worker entitlements when not enough money can be raised during an insolvency.

Its report notes there is 28 workers who will not be able to make use of the government scheme as they are not citizens or permanent residents.

Parties close to the liquidation point out Mr Sali or Mr Calombaris cannot direct specific money to former employees as any funds they provide would be seized by the liquidator and directed to the CBA as the secured creditor.

They also note that Mr Sali tipped $11.5 million into the business after he bought in it early 2017 which paid out wage underpayments incurred before he was involved in Made.

Sourced By: The Daily Telegraph

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