1800 Lasagne’s future looks grim as creditors warned ‘don’t expect a return’

Melbourne cult restaurant 1800 Lasagne is doomed to fail unless a last-minute buyer emerges, as administrators warn creditors they will not get what they are owed from the business.

Administrators for the Thornbury business told creditors this week they can expect no return after examining the restaurant’s books, and recommending that they wind it up.

They also flagged the potential conduct of the directors operating the business while insolvent, as well as their handling of loans, could warrant scrutiny by a liquidator.

The administrators – Todd Gammel and Matthew Levesque-Hocking, of Sydney-based accountancy firm HLB Mann Judd – found the business was insolvent as of March 31, 2021.

“There’s still ongoing discussions around a sale, and we’ll try to close that out in the future,” Gammel told The Age.

Creditors are set to vote on Wednesday about whether the business should be wound up.

“1800 Lasagne Bar is unable to pay its debts as and when they fall due and is therefore insolvent,” the administrators said in the report.

1800 Lasagne founder Joey Kellock – the business’s current director – opened the restaurant’s first venue in August 2020, on High Street in Thornbury.

The business’s directors could have breached their duties by trading while insolvent, or because of various related-party loans, the administrators said.

The administrators found 1800 Lasagne owed employees at least $391,000, and unsecured creditors a total of more than $2.9 million – about $2 million of which was debt to the Australian Taxation Office, and $382,000 of which was debt from related-party loans.

“A review of the books and records indicates that 1800 Lasagne Bar has received several related-party loans to meet wages and other costs, which may have been repaid ahead of other creditors and loan balances reduced compared to other creditors,” the administrators said.

“This repayment pattern may constitute an unfair preference.”

If the business was wound up, liquidators could look into loans to determine if they amounted to “unreasonable director-related transactions”, the administrators said.

The report noted directors could argue they were not personally liable for debts billed while a business was insolvent, and liquidators had to thoroughly review any potential breaches of duty.

The administrators added: “Obviously, considerations in pursing recoveries against the directors include whether there is any potential recovery from the directors.”

In a liquidation scenario, administrators expected a “large shortfall on the return to secured creditors”, which would depend on how much the business sold for – if it did sell.

“There is not expected to be any return to creditors or employees besides what will be covered by the [Fair Entitlements Guarantee scheme],” the administrators said.

“Therefore, any return for unsecured creditors is unlikely without significant recovering in a liquidation.”

The guarantee scheme gives employees to up to 13 weeks’ unpaid wages, up to five weeks’ pay in lieu of notice, and additional leave entitlements.

While it was unlikely creditors would get a return, that could change if some of the business’s transactions were deemed “voidable” – including if they were unfair preference payments, administrators said.

1800 Lasagne’s revenue growth hit a record $3.8 million in the 2024 financial year, but its margin wasn’t enough to cover costs including wages, subcontractors and rent, the administrators said.

The restaurant earned a coveted chef’s hat in 2023, with Good Food critic Besha Rodell saying that “there is simply nothing about it not to love”.

In the same year, celebrity chef Jamie Oliver dined at the Thornbury venue during his time in Melbourne filming for season 16 of MasterChef.

Kellock has been contacted for comment.

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