A Million-Dollar Debt Puts Iconic Bars in Jeopardy
If you’re a Melbourne local, you might be shocked to hear that two of the city’s most beloved venues are on the verge of collapse.
The Carlton Club and the Windsor Castle Hotel, both owned by Tracey Lester, have been struggling to stay afloat amidst the ongoing pandemic. With debts exceeding $1 million, administrators are racing against time to find a buyer and save these iconic hospitality businesses.
The Covid-19 Pandemic Takes Its Toll
According to Ms. Lester, the past few years have been “incredibly challenging” for both venues. The restrictions and uncertainty brought on by the pandemic have made it difficult for businesses like hers to stay profitable. In a statement, she expressed her commitment to working with her advisors and legal team to find a solution that benefits her staff, the venues, and the hospitality industry as a whole.
A Daunting Debt of $1.5 Million
The Australian Taxation Office is owed a staggering $1.12 million, including superannuation, making it the largest creditor. Other unsecured creditors are owed a total of $1.5 million. It’s a daunting figure, and one that has pushed Ms. Lester to bring in administrators Cor Cordis to explore restructuring or sale options.
Business as Usual (for Now)
Despite the administration process, both venues will continue to operate as usual. The Carlton Club, known for its restaurant, nightclub, and rooftop cocktail bar on Bourke Street, and the Windsor Castle Hotel, famous for its pink elephants on Chapel Street, will remain open for business.
A Call to Action for Buyers
Administrators Rachel Burdett and Shaun Matthews are urging potential buyers to come forward with “urgent expressions of interest” to either restructure or recapitalise the company. They’re also open to a deed of company arrangement (DOCA), which would avoid liquidation.
A DOCA: The Last Resort?
Ms. Lester has proposed a DOCA, a binding agreement between the company and its creditors. This would allow the businesses to avoid liquidation, but it’s unclear whether this will be enough to save them.
A Long History of Hospitality
The New Zealand-born artist turned publican has operated the businesses for over 20 years under leasehold agreements with private owners. She’s been promoting the sale of the venues on her Instagram account, hinting that it’s time for a change.
A Glimmer of Hope
While the situation looks dire, there’s still hope for these beloved Melbourne venues. If a buyer can be found, or a restructuring deal can be reached, The Carlton Club and the Windsor Castle Hotel might just get a second chance. For now, it’s business as usual, but the clock is ticking.