The directors of PSVC Limited, which operated the Lone Star Dunedin franchise for a number of years, blamed Covid-19 and the George St roadworks for the insolvency.
The liquidators’ final report said the company was placed into liquidation after the restaurant was sold to new owners. The restaurant continues to trade under new management.
“However insufficient funds were realised to pay all company creditors in full,” the report said.
Hospitality New Zealand Otago branch president Mark Scully said the news was a little bit surprising, as establishments with good food offerings generally tended to be more consistent than bars.
He did not often hear of company liquidations in Otago’s hospitality industry.
“I’d hate to think this is the start of some, because it’s been happening every week in Auckland and Wellington and around the country.
“But Dunedin’s been not too bad.”
The city appeared to be somewhat immune to cost-of-living pressures, but it was no surprise that businesses were finding it tough, he said.
The company was placed into liquidation in November last year by shareholder resolution, with Trevor and Emma Laing, of Laing Insolvency Specialists, appointed joint and several liquidators.
The liquidators’ final report, released last week, said a preferential claim for $887,076.66 was filed by the Inland Revenue Department (IRD).
A payment of $237,752.57 was made, leaving it $649,324.09 out of pocket.
“No funds were available for a distribution to unsecured creditors.”
Ms Laing said there were 17 unsecured claims received in the liquidation totalling $494,361.74 — the majority of which related to the unsecured portion of the IRD’s claim, such as penalties and interest they applied to the core debt.
The liquidators’ initial report listed at least six Dunedin businesses as among the unsecured creditors — as well as other companies with branches in the city.
“The directors attribute the insolvency of the company to the ongoing effects of Covid, the impact of the road closures due to prolonged roadworks, and the general downturn due to cost [of] living,” the report said.
“The liquidators have also been advised that the shareholders have advanced significant amounts to the company to pay creditors.”
