Probe: Cafes traded stale?

FOUR Hope Island restaurants may have been trading insolvent for almost two years before they forcibly closed their doors in April, according to a report prepared by liquidators.

Liquidators McGrath Nicol claims Pacific Holdings Vanuatu (PHV), the owners of the restaurants, owes more than $3.8 million to creditors.

McGrath Nicol partner Anthony Connelly said in his report investigations needed to be completed into whether the

business had been insolvent from as far back as June 30, 2016.

Tiffany’s Cafe and Cocktails, Joe’s Burger Bar, New York New York and Manhattan on Hope suddenly closed in April, leaving dozens of staff unemployed. The restaurants were all run by PHV and director Jo-Anne Crestani offered little explanation to staff.

The liquidators were appointed after the Australian Taxation Office applied for the company to be wound up due to a more than $500,000 tax bill.

Mr Connelly wrote: “Based on the limited information held by me, my preliminary investigations indicate PHV may have been insolvent from at least 30 June 2016 for the following reasons:

● Financial statements held indicate that PHV was incurring losses;

● Financial statements held indicate that PHV had insufficient current assets to meet its current liabilities; and

● Debt to the ATO has increased with minimal payments being made.

Mr Connelly said the company’s financial records had not been provided to him.

The report further alleges the lack of books means Ms Crestani “may have breached” her obligation under the Corporations Act to keep financial records.

“Investigations with respect to insolvent trading and voidable transactions are ongoing, however, they have been hampered by the lack of books and records I have been provided with,” the report said.

Mr Connelly wrote Ms Crestani’s partner, Randall McFie, removed “most of the plant and equipment” from Manhattan on Hope before liquidators were appointed.

The Bulletin photographed Mr McFie removing items from Manhattan on Hope days after the eatery closed.

Mr Connelly is yet to hear from Mr McFie about the “distribution of sale proceeds”.

Mr McFie is considered to be a “related party” due to his connection to Ms Crestani, Mr Connelly alleged in the report.

“It appears Mr McFie may have acted as a de facto director of PHV,” the report said.

Mr Connelly wrote the liquidators were yet to lodge their report with ASIC in relation to their investigations. He warned further probes could be hampered due to insufficient assets to cover the liquidators’ costs and potential litigation costs and a lack of books and records.

Mr McFie said he was “in North America” and declined to comment.