DONUT BOSS FACES FAMILY BANKRUPT LAWSUIT
HOTEL and doughnut entrepreneur Damian Griffiths has been hit with a bankruptcy lawsuit after he failed to pay up almost $550,000 to estranged relatives, including a man who grew up like his “brother”.
The Federal Circuit Court lawsuit in Brisbane comes as the entrepreneur’s Doughnut Time chain, which sells doughnuts costing up to $8, closed six stores and offloaded another seven to a businessman associated with Mr Griffiths. The Mermaid Beach store remains open, however the Surfers Paradise store has closed and a popup shop in Pacific Fair is no longer open.
Staff said dozens of employees have lost their jobs and pay was outstanding. Mr Griffiths, who would not do an interview, only said in a statement that he would try to pay monies owed.
The court action scheduled for April is a sequestration filing – which leads to bankruptcy if approved.
The creditors petition was just lodged by a family company whose director is Toowoomba-based Murray Griffiths.
Murray, 46, is one year older than Dalby-born Damian and said their fathers farmed together.
“We grew up brothers,” Murray said.
Murray said the family was not trying to be callous in the action. “We just want to get our money back,” he said.
Family members had lent Damian money for his Limes Hotel venture. The original loan was for $1.35 million and Murray said some money had been paid back but recouping the last bit “was getting harder and harder”.
The family had last year tried to recoup the loan in Brisbane’s District Court, and were awarded a judgment for $557,704.97.
“He still hasn’t paid us,” Murray said. They have since taken the bankruptcy action in the Federal Circuit Court.
Murray said they had been involved in the Limes Hotel for years but Damian would often only show part of the financial books. “He would never give us information we wanted,” Murray said.
Damian Griffiths has been battling on several fronts. Receivers last year seized two of his companies running the Limes Hotel and Alfred & Constance bar, while another Griffiths’ entity that had once run Les Bubbles bistro also fell into liquidation.
In his statement about Doughnut Time, Mr Griffiths said he could “no longer continue to fund the business”. That was due to the bankruptcy threat from relatives and another landlord seeking $400,000 for a Sydney site that was “simply a ghost town”, he said.
“I tried to resolve things but I have just run out of money,” he said.
The six stores that closed could not be sold “mostly due to the lease conditions of high rent”. The purchaser of the remaining stores is Dan Strachotta, who was Griffiths’ group chief executive officer.