Linchpin Hospitality, operator for a half-dozen venues from Jon Adgemis’ Public portfolio, has collapsed into administration, said to owe more than $1.2 million.
On the back of Public’s very public battle with creditors, Linchpin emerged as provider of management services to pubs the Empire Hotel in Annandale and Lady Hampshire in Camperdown, and accommodation venues the Diplomat Hotel in Sydney and Clifton Hotel in Melbourne.
The engagement saw Linchpin manage all aspects of daily operations, including marketing and social media, and critical financial dealings and reporting. Celebrity chef George Calombaris was appointed culinary director and launched Double Happy Chinese diner at the Empire, but he confirms he no longer works with Linchpin.
For these services Linchpinwould charge monthly management fees and in some cases receive a share of revenue.
However, problems arose when the venues did not generate enough revenue to pay for the management services.
In July Deutsche Bank stopped providing funds for Linchpin to run the venues, and that month reports began to emerge of staff being laid off.
A loan agreement between Linchpin and the venues was broached, but this did not materialise and in September financiers made the decision to sell the operations to OpCo VHCF TH, headed by Thomas Wallace and Michael Birch.
In Q3 of 2024 Deutsche took control of five of Public’s pubs, now reported to hold accumulated debt of $371 million.
As major lender the bank also holds the security on The Empire and The Diplomat, which are currently trading, as well as the Exchange Hotel and Claridge House in Darlinghurst, and the South Bondi Hotel, previously known as Noah’s Backpackers, which are all still in various stages of renovation.
At the end of September administrator Timothy Cook from Balance Insolvency was appointed to Linchpin, after the company had ceased trading.
Outstanding debt includes over $386k to staff – some personally owed as much as $74k – atop statutory debt, plus around $365k owing to f&B investment company Amina Capital and another $300k to the ATO, according to a report to ASIC by director Marco Bettelli.
The company claims it is owed more than $330k, primarily for unpaid management fees.
VHCF TH have proposed to creditors a rescue arrangement that would see staff paid in full and other eligible unsecured creditors receive six cents on the dollar, rather than risk getting nothing.
The receivers have wasted no time working to recoup what monies they can, with several of the venues currently being launched to market.
There is no suggestion Adgemis or Calombaris have any direct involvement with Linchpin.
