Deutsche Bank tips Adgemis pubs under
Investment bank Deutsche Bank has taken control of five pubs owned by Jon Adgemis’s Public Hospitality, appointing receivers ahead of a court hearing where tax authorities are attempting to bankrupt the former KPMG dealmaker.
Deutsche Bank was part of a major refinance of $400 million worth of Public’s debt in the middle of 2024. McGrathNicol has been appointed receiver over five Public venues. KordaMentha has been appointed voluntary administrator over the development group.
Deutsche Bank is owed $371 million but has priority security over five pubs: The Empire Hotel in Annandale, The Diplomat Hotel in Potts Point, The Exchange Hotel in Balmain Claridge House in Darlinghurst and the South Bondi Hotel, formerly Noah’s Backpackers.
The Empire and Diplomat are operating, while the other three sites are under construction.
Adgemis founded Public Hospitality during the pandemic, accumulating a large portfolio of pubs and development projects across Sydney and Melbourne. Financing difficulties left it on the brink of collapse last year. While part of his business was rescued in a refinancing agreement led by Deutsche Bank, the unwinding of Public Hospitality left Adgemis with a long list of unpaid staff and furious creditors.
The development is a significant blow to Adgemis who is facing a bankruptcy hearing in the Federal Court on Friday.
The ATO claim they are owned $162 million by Adgemis. Much of the debt is made up of director penalty notices. But the tax office also has much wider claims against his companies, which Adgemis is disputing.
On Monday, the Federal Court of Australia approved the ATO to take the place of Monaco-based rag trader Richard Gazal in his bankruptcy action against the beleaguered publican.
Gazal issued Adgemis with a formal demand – known as a bankruptcy notice – to repay $26 million that he owed last year. In November, Adgemis applied to the court to have the notice set aside. Adgemis has previously claimed Mr Gazal’s dispute was unrelated to bankruptcy proceedings.
As Gazal pursued him for payment in June, Adgemis signed his property over to WLP Restructuring in order to get his personal creditors to agree to a personal insolvency agreement so he could avoid being deemed a bankrupt. As part of the vote on the personal insolvency agreement (PIA), Gazal has had to wait to continue his action against Adgemis.
The ATO and the Australian Financial Security Authority raised major issues with Adgemis’ PIA deal, intervening in two meeting of creditors in August.
Adgemis is fighting to avoid bankruptcy over $1.8 billion of debts owed to creditors, largely personal guarantees on money he borrowed in his attempts to build a pub and hotel empire.
The trustee prepared a report on his finances addressed to creditors, recommending they accept an offer of 0.17¢ to the dollar with Adgemis extending a $3 million payment over 12 months.
