Sydney pub baron Jon Adgemis reportedly transferred over $9 million from companies within his Public Hospitality Group (PHG) in the year leading up to their collapse. An administrator’s report claims that he engaged in trading while insolvent.
Adgemis, a prominent Sydney businessman known for his extravagant lifestyle and high-profile relationships, established a hospitality empire that included more than 20 venues such as Oxford House and The Norfolk in Sydney, as well as Karen Martini’s Saint George and Guy Grossi’s Puttanesca.
However, several businesses in this portfolio went under last month after Muzinich & Co, a New York based private credit investor, withdrew from a deal to refinance approximately $100 million in debt.
A creditors report prepared by advisory firm BDO and submitted to the corporate regulator alleges that Adgemis managed his businesses while they were insolvent, a situation that has reportedly existed since August 2021.
BDO partner Duncan Clubb informed creditors that initial investigations indicate Adgemis may have violated sections of the Corporations Act, which pertain to the responsibilities of exercising care, diligence, and acting in good faith.
“It appears [Adgemis] and related entities withdrew funds in the year leading up to the appointment of external administrators totalling $475k and $9m, respectively,” Clubb wrote.
According to Clubb, Adgemis’ withdrawals could be classified as unfair preference payments, uncommercial transactions, and unreasonable director-related transactions.
However, Adgemis argues that if administrators accept his proposal to buy back the business, many of the company’s creditors will receive repayment. He warned that if this proposal is not accepted, liquidation of the companies and sale of their assets is likely to follow.
Source: Financial Review.
