Sydney hotels up for sale as pub baron Jon Adgemis seeks bankruptcy

Sydney’s flashy hospitality dealmaker Jon Adgemis has fallen on his sword, declaring himself bankrupt with debts of about $1.8 billion.

The move follows years of financial woes for the Public Hospitality Group founder, who had bought venues including The Norfolk in Redfern, Oxford House in Paddington, The Strand Hotel in Darlinghurst and the Camelia Grove Hotel in Alexandria.

“I take responsibility for the position that has been reached,” Adgemis, a former KPMG partner, said in a statement on Thursday.

“I am deeply disappointed that my broader vision for the group did not come to fruition, and that, despite sustained efforts, I was unable to deliver a better outcome for creditors.”

On Monday, the Australian Taxation Office successfully applied to replace Monaco-based businessman Richard Gazal as the lead plaintiff in a case seeking Adgemis’ bankruptcy, pursuing him for personal debts of more than $150 million.

The following day, McGrathNicol were appointed as receivers for five remaining hotel properties. The Diplomat in Kings Cross and The Empire in Annandale were due to be put up for sale immediately, while Balmain’s The Exchange and Darlinghurst’s Claridge House would remain under construction, the Australian Financial Review reported.

Options for the South Bondi Hotel, formerly Noah’s Backpackers, were still being considered.

Adgemis, 47, had become known for both his financial difficulties and extravagant lifestyle, which once included a yacht that had previously belonged to Hollywood star Shirley Temple.

Until earlier this year, he had been living in the “Bang and Olufsen” mansion in Point Piper, paying up to $20,000 a week in rent.

More recently, Adgemis was living in a Bondi apartment owned by fund manager Will Vicars. A Rose Bay property, purchased with his mother Rose for $4.45 million in 2018, was repossessed.

Adgemis had been exploring a personal insolvency agreement, an arrangement that would have warded off bankruptcy and paid a small amount back to some creditors.

In late August, the Inspector-General in bankruptcy intervened, voicing concerns that the trustees running the process had not adequately investigated Adgemis’ assets or provided enough detail to creditors.

The Inspector-General had not found any breaches but issued a warning about the consequences of misusing the system.

A statement from an Adgemis spokesman on Thursday suggested there had been delays in finalising of the personal insolvency agreement.

Under a deed of company arrangement, the spokesman said, $7.3 million in convertible notes would have funded “the payment of superannuation and employee entitlements owed to approximately 800 former employees”.

But after the expiry of a loan facility, these convertible notes became “practically worthless”.

On Tuesday, McGrathNicol were appointed as receivers for five remaining hotel developments, including the Empire Hotel in Annandale and the Hotel Diplomat in Kings Cross.

This week’s collapse comes 16 months after a major restructuring of Public Hospitality Group’s debt by a consortium led by global investment provider Deutsche Bank. The deal had provided a $400 million lifeline.

Adgemis, who graduated with a degree in economics, took up a role in KPMG’s mergers and acquisitions team in 1999.

In 2015, he founded the JAGA Group, a property venture. During the pandemic, he started buying up pubs and refitting them as part of Public Hospitality Group.

“The way in which we looked at those assets was that they’re well-positioned assets,” Adgemis said in a 2022 interview. “They’re doing very well on the ground level, but there’s greater opportunity in everything above the ground.”

But by 2024, Public Hospitality Group had begun to shed venues. It was forced to hand over hotels such as the Town Hall in Balmain and the Kurrajong in Erskineville to receivers who then sold them.

Adgemis said on Thursday he would fully co-operate with the bankruptcy process. As a bankrupt, he will be barred from acting as a company director for a period of time.

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