Administrators have recommended South Fremantle brewhouse Running With Thieves be liquidated with $9.3 million believed to be owed to creditors.
Administrators have recommended South Fremantle brewhouse Running With Thieves be liquidated with $9.3 million believed to be owed to creditors.
The brewery, distillery and restaurant, registered as Atari Enterprises Trading Company, reportedly owes $4.5 million in shareholder loans and $3.5 million to the tax office, Business News can reveal.
Of the $3.5 million owed to the government, Running With Thieves owes $2.3 million in excise duty, otherwise known as alcohol tax, according to the administrators report to creditors.
The Marine Terrace-located business has reportedly traded at a loss since 2018, culminating in a loss of $7.8 million between July 2018 and June 2023.
The administrators report identified that the company may have traded whilst insolvent and estimated that a quantum loss of $3.2 million may have been incurred, subject to further investigations.
It owns a maximum of $571,000 in total assets, including $46,000 in cash at bank.
Preliminary investigations attributed the company’s situation to poor economic conditions, trading losses and being over leveraged.
The administrators have recommended creditors that Atari Enterprises Trading Company, AKA Running With Thieves, be wound up and placed into liquidation ahead of a second creditors meeting next week.
It comes after administrators Richard Albarran, Cameron Shaw, and Aaron Dominish from Hall Chadwick were voluntarily appointed last month.
At the time, administrators said they planned to continue to trade the company “business as usual” and keep all the employees on the books.
The administrators said they were also advised of stakeholders’ intention to propose a deed of company arrangement at Tuesday’s creditors meeting.
According to the report released today, a DOCA has not yet been proposed to restructure the company.
The report also revealed that the director, Scott Douglas, was attempting to acquire additional equipment finance from NAB but was rejected due to the company's ATO debt.
Mr Douglas reportedly has his own unpaid private tax bills, according to legal action launched last month in the Supreme Court.
According to the report, Running With Thieves’ income was generated from the wholesale of alcoholic beverages and sales from its South Fremantle hospitality venue.
In the director’s explanation section of the report, it read that due to the restrictions imposed by the state government in response to the pandemic the company was “forced to incur significant amounts of debt at high rates of interest to survive and continue to trade”.
“The company had just opened a large production facility and hospitality venue, which due to these restrictions was unable to operate economically for the first two years of operation,” the report read.
“As a result, the interest on this debt became prohibitive to service”.
The administrator agreed with the director’s reasoning, elaborating that the company entered into $4.5 million in shareholder loans and a NAB asset finance loan of $1.1 million before June 2020.
The report also revealed Running With Thieves spent $2 million on venue setup costs at the Marine Terrace building, which it does not own.
Administrators considered the viability of commencing a business sale campaign but determined it was uncommercial due to the fact the brewhouse sold its equipment last month and doesn’t own its trading name.
The future of the company will be further discussed at a second creditors meeting.
