The September 9 report by liquidator Bryan Williams of BWA Insolvency listed 57 known creditors, including 25 individuals.
Secured creditors were estimated to be owed about $217,000, and unsecured creditors more than $300,000, the report said.
Preferential creditor claims from Inland Revenue and for employee entitlements were estimated at about $228,000 and $39,000 respectively.
The business had about $80,000 in a shareholder’s account, and the amount realised from the sale of the business was withheld for “commercial reasons”, the report said.
The report gave the total estimated deficiency as about $705,000.
Creditors had until October 10 to make claims. It was not known how long it would take to finish the liquidation process.
The liquidator said it was too early to say whether a dividend would be payable to unsecured creditors.
“It is anticipated that employee entitlements, as preferential claimants, would be paid in full during the liquidation.”
One of the former staff, who told the Bay of Plenty Times she was owed holiday pay, said that news was “a big relief” to her and her former colleagues.
She had been “shocked” and “very sad” to read how much the company owed creditors, and this explained the decision to go into liquidation.
Why the business went into liquidation
Rycorlin’s sole director is Jaqui-Lyn Donaghy. She and her husband, Trevor Donaghy, along with a trust, are shareholders.
The report said the company director had explained that the business had experienced a “steady decline” for several years.
This was linked to reduced parking in the area and an overall decline in patronage in the CBD.
“The situation was made worse by the Covid-19 pandemic and recession for the hospitality industry that followed,” the report said.
“Persistent efforts were made to reduce overheads, including reducing the restaurant’s footprint, but demand remained low … and the company’s reserves were deteriorating.”
The shareholders decided to sell the business, then put the company in liquidation so “its affairs could be handled by an independent person”.
Meet Lone Star Tauranga’s new owners
Lone Star New Zealand national operations manager Paul Steiner said the franchise was sold to Tauranga couple Vikram and Geeta Sharma on September 16.
The Sharma family, including their two children, took possession of the business on Tuesday.
“We’re excited to welcome the Sharma family to the Lone Star family. Vikram Sharma had a few years of hospitality experience in busy restaurants in the Wellington region.
“Both Vikram and Geeta own a couple of IT repair shops in the Bay of Plenty region and have lived in Tauranga for the last five years. They are excited by the challenge in front of them.”
Steiner said all existing staff had been offered continued employment under the new ownership, “ensuring operational continuity and job security for the team”.
Lone Star Tauranga would continue operating under the established brand standards with full support from the national team.
Steiner said the Sharmas were enthusiastic and committed to hospitality.
“We’re confident they’ll deliver the excellent service Tauranga has come to expect.”
Vikram Sharma said the family looked forward to becoming part of the Tauranga community and “serving locals and visitors with the great food and hospitality that Lone Star was known for.”
Lone Star Tauranga opened in Tauranga in 1999 and is located on The Stand and the corner of Harington St.
The Donaghys owned and operated the branch since 2011.
Lone Star has been operating in New Zealand for 37 years and has 25 restaurants nationwide.
Sandra Conchie is a senior journalist at the Bay of Plenty Times and Rotorua Daily Post who has been a journalist for 25 years. She mainly covers police, court and other justice stories, as well as general news. She has been a Canon Media Awards regional/community reporter of the year.
