Popular Melbourne pub business collapses
Two prominent Melbourne pubs operated by artist-turned-publican Tracey Lester – the Carlton Club in the Melbourne CBD and the Windsor Castle Hotel near Chapel Street in the inner suburbs – have collapsed, with administrators urgently seeking buyers for the businesses and their assets.
New Zealand-born Ms Lester has operated both businesses under leasehold agreements with private owners for more than 20 years. Major creditors include the Australian Tax Office, which has lodged claims for outstanding superannuation, and National Australian Bank. Unsecured creditors are owed about $1.5 million.
“The past few years have been incredibly challenging as we navigate the ongoing impacts of the COVID-19 pandemic on both The Windsor Castle and The Carlton Club,” Ms Lester said in a statement.
“We are at the closing end of a restructuring process and I remain committed to working closely with my advisors and legal team to achieve the best possible outcome.”
The Carlton Club, a popular multi-level late-night venue with a restaurant and rooftop bar near Bourke Street Mall, was operated by Ms Lester’s Furry Meatball.
The Art Deco-style Windsor Castle Hotel on the corner of Albert and Upton Streets in Windsor (with three pink elephants on its roof) was operated by Ms Lester’s Floss Bottom.
Both businesses are now in the hands of voluntary administrators Shaun Matthews and Rachel Burdett from Cor Cordis, who were appointed on November 27.
According to the minutes of a December 9 creditors meeting for Furry Meatball, the administrators are seeking “urgent expressions of interest to either restructure or recapitalise the company, including via a deed of company arrangement (DOCA), and/or purchase [of] its assets”.
Ms Lester proposed the DOCA, a binding agreement between the company and its creditors that is an alternative to liquidation.
The minutes note that The Carlton Club continues to trade in order “to preserve the value of the assets”.
The ATO has lodged a claim in relation to Furry Meatball for outstanding superannuation of $107,044 covering the period from January 1 to June 30 and has submitted a total claim of $1.12 million. The Carlton Club employed 48 people at the time administrators were appointed.
Ms Lester had promoted the sale of both businesses before their collapse on her Instagram account.
”After 24 years, it’s time to pass my beloved ‘second child’ on to its new custodian who can look at [it] with fresh eyes and inject some new energy and FUN into Windsor’s favourite local pub,” she wrote in September.
In May, she posted an ad for The Carlton Club headed “Ever dream of owning your own bar?” and beneath it the line: “Expressions of interest now open.”
Property records show the freehold to The Carlton Club is held by Pandez Holdings, which is owned by Philip Kapogiannis. Mr Kapogiannis is a director of pop culture toy distributor Geek X. He purchased the property for $5.9 million in 2002.
The Windsor Castle Hotel is owned by a company called Chestervillage, with ownership split between the three children of the late hospitality investor and ceramic artist Nick Fermanis, who died in 2015.
A second report to creditors is due to be issued on or before December 27, and a second meeting of creditors will take place on or before January 6.
The collapse of the two Melbourne pubs follow the collapse of parts of the hotel empire of Public Hospitality Group set up by Jon Adgemis.
