Celebrity chef Scott Pickett’s business owed $27 million before collapse

An arm of prominent Melbourne chef Scott Pickett’s restaurant group racked up $27.2 million in debt before its collapse and had not properly done its accounts since 2022.

Pickett appointed administrators to three companies linked to his hospitality empire in late September after struggling to meet its debt repayments to the Commonwealth Bank.

One of the companies in administration – Rogue Traders Group – was a joint venture between Pickett and the First Guardian superannuation fund, which collapsed earlier this year amid an investigation by the corporate watchdog into the fund and its operator David Anderson.

Rogue Traders owns four of Pickett’s venues: Matilda 159, Smith St Bistrot, Longrain and Chancery Lane – all of which remain open for business despite the group’s financial troubles.

The business is already working with one interested investor on a restructure that it is hoped will pump cash into the business and keep the restaurants going.

A recent report by the administrators from Romanis Cant alleges Rogue Traders may have been trading while insolvent for a year before entering administration because it had stopped making repayments to the CBA.

According to administrators, the four restaurants were bankrolled by Rogue Traders using the money it had borrowed from the CBA and First Guardian.

The CBA, which has security over all of Rogue Traders’ assets and a personal guarantee from Pickett, is expected to be repaid in full the $12.8 million it lent the group. It is unclear whether there will be any repayment to First Guardian, which is owed $14 million.

At the time of the administration, Matilda on Domain Road in South Yarra owed Rogue Traders $5.6 million and Chancery Lane in the CBD $5.8 million.

Pickett’s Collingwood French-inspired fine diner Smith St Bistrot was also due to pay $3.7 million, while his modern Thai hotspot Longrain owes $2.1 million, and his food preparation business owes a further $1.8 million.

All up, Pickett’s various businesses, which includes the venture that does food preparation for his restaurants, owed Rogue Traders $21 million, the administrators said.

The administrators are still assessing their debts, noting the full amount due was unclear because the books of the business had not been properly balanced with the restaurants’ books since 2022.

The report said Pickett believed the figures were different.

The administrators have sent letters of demand to each of the restaurants and the food prep business requesting repayment of the amounts.

“It is evident that each of the related entities do not have the financial capacity to repay the amounts demanded,” the report notes.

Pickett’s popular Northcote restaurant Estelle sits outside Rogue Traders and remains unaffected by the collapse.

Despite the group’s financial woes, Pickett has remained dedicated to the future of his hospitality empire.

“I want to make it clear to everyone that the remaining companies in the group, which include my restaurants, are not affected,” he said in a statement.

“Our restaurants will continue to trade as usual and all bookings and vouchers will be honoured,” he said.

“All staff remain employed. Their wages, superannuation contributions and entitlements are fully up to date and will continue to be paid on time.”

The Commonwealth Bank has already moved to sell two properties owned by Rogue Traders – a large apartment in Fitzroy and the Chancery Lane restaurant on Little Collins Street – to help clear out the debt.

The sale of those properties is expected to leave a $5 million to $6 million shortfall to the CBA. It is hoped the new investor can help Pickett’s businesses clear out the remainder of that debt.

The report reveals Pickett has also borrowed heavily for his business from the National Australia Bank, which has first rights over his personal assets, including the chef’s luxury three-storey beach house in the Surf Coast idyll of Wye River.

Company records show First Guardian became the majority owner of Rogue Traders in 2021, with Pickett controlling a 30 per cent stake of the business.

As previously revealed by this masthead, the loan from First Guardian helped support Pickett’s restaurant empire at a time when Melbourne’s hospitality scene was hit hard by lockdowns and COVID-19 restrictions.

The administrators to Rogue Traders believe some of the money the company borrowed from the fund was used to buy the Chancery Lane property for $3.5 million.

The administrators said Rogue Traders appeared to have borrowed another $5 million from the fund as part of its acquisition of the Matilda and Smith St Bistrot businesses, though the books and records were not clear and more investigations were required.

Liquidators of the First Guardian fund have warned investors that the loan is likely unrecoverable.

First Guardian’s manager David Anderson resigned as a director of Rogue Traders in March after the corporate watchdog accused him of mismanaging the fund, including by making a number of investments in his own pet projects.

Those projects included Anderson’s business with Pickett and other hospitality ventures such as a brew house and two unrelated restaurants in Richmond.

Anderson has long denied any wrongdoing over the collapse of the fund, which has wiped out $500 million in retirement savings for nearly 6000 people.

The administration process continues. Any restructure of the Rogue Traders business will be announced at a later date.

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