A major financial crisis has struck the hospitality business of renowned Melbourne chef Scott Pickett, with his restaurant group accumulating a staggering $27.2 million in debt prior to its collapse. The situation escalated in late September 2023, when Pickett appointed administrators to three companies affiliated with his Rogue Traders Group after failing to meet debt repayments to the Commonwealth Bank.
The troubled business included several popular dining venues, such as Smith St Bistrot in Collingwood, which are still operational despite the ongoing financial difficulties. The Rogue Traders Group, a joint venture between Pickett and the First Guardian superannuation fund, had not maintained proper financial records since 2022. This lack of oversight contributed to the company’s mounting financial woes.
Details of the Financial Collapse
The administrators from Romanis Cant have indicated that Rogue Traders may have been trading while insolvent for over a year before entering administration. Reports suggest that the company ceased making repayments to the Commonwealth Bank, which holds security over all of Rogue Traders’ assets. The bank is expected to recoup the full $12.8 million it lent to the group, backed by a personal guarantee from Pickett himself.
Rogue Traders operates four venues: Matilda 159, Smith St Bistrot, Longrain, and Chancery Lane. At the time of administration, Matilda owed Rogue Traders $5.6 million, while Chancery Lane’s debt stood at $5.8 million. The total amount owed to the First Guardian superannuation fund is reported to be $14 million, leaving uncertainty around potential repayments to that entity.
Despite the distressing circumstances, there is some optimism for the future of the restaurants. Rogue Traders is currently in discussions with an interested investor regarding a restructure aimed at injecting much-needed cash into the business. This move is crucial to sustaining the operations of Pickett’s beloved dining establishments.
The unfolding situation serves as a stark reminder of the challenges faced by many in the hospitality sector, particularly in the wake of the COVID-19 pandemic, which has significantly impacted the industry. As the administrators work to navigate this financial crisis, the future of Scott Pickett‘s restaurant group and its venues hangs in the balance.
