Workers left high and dry by the sudden closure of popular Yarraville cafe could be bailed out by the federal government as they chase more than $160,000 in outstanding payments.
Cobb Lane bakery-cafe owner Matthew Forbes says he had no choice but to liquidate the company behind the business after racking up a $1 million debt.
Forbes – former pastry chef at Shannon Bennet’s Vue de Monde – opened the cafe on Anderson Street in 2013. But heavy debts, driven by high costs in the cafe arm, sent the business to the wall in May.
Company documents show Matthew Forbes Pty Ltd was placed into liquidation on May 7, with liabilities outstripping assets by about $776,000.
Two days later, Mr Forbes publicly announced the cafe’s sudden closure, vowing to continue the wholesale trade.
The liquidation left about 35 workers with $160,000 in unpaid leave and superannuation entitlements.
Over $60,000 is owed to suppliers and more than $150,000 to the tax office. The bulk of the debt, more than $600,000, is owed to Mr Forbes and his wife.
Mr Forbes said an inability to meet the mounting running costs finally forced his hand.
“We had to go into liquidation because of the debts we had accrued. The shop was haemorrhaging a lot of money each week.”
The week after commencing liquidation, Mr Forbes started a company called Dale & Moors Pty Ltd.
Through the new company he has taken on 13 of the former staff and bought out the assets needed to continue the wholesale arm of the business.
Mr Forbes cites staff costs as one of his biggest expenses, saying there was nothing he could do to stop the remaining 20 or so workers losing their jobs.
He said they are being assisted to recover their unpaid entitlements – running as high as $11,000 in one case – via the federal government’s Fair Entitlements Guarantee for workers left in the lurch by business collapses.
Unsecured suppliers have little prospect of seeing their money, including almost $5000 owed to a Yarraville cleaning company.
The 13 retained staff will be able to access their leave entitlements, but other creditors will have to wait months before learning whether they will receive a return.
Liquidator Bilal Haider of Hamilton Murphy said investigations are continuing into the state of the company at its collapse and whether any payment will be made to unsecured creditors.
“Our investigations in relation to insolvent trading are continuing, and at this stage we have not formed an opinion regarding same,” he said.
The liquidation is expected to be finalised by next June.
Mr Forbes said his focus is now on expanding Cobb Lane’s wholesale arm.