The Doughnut Time at Degraves Street in Melbourne was its most popular store. (Supplied: Andrew Henderson)
Doughnut Time is getting liquidated — despite its new chief executive saying he would buy the company and “turn it around”.
Its workers, who are owed more than an estimated $200,000 in unpaid wages, have also been kept in the dark.
None of the workers were told that the troubled dessert chain went into voluntary administration last Friday, and had appointed Michael Caspaney, the principal of Menzies Advisory, as its liquidator.
The ABC confirmed this by accessing ASIC’s insolvency notices, followed by a telephone call to Mr Caspaney.
Only told by middle management
Instead, the workers found out about the company’s liquidation by an email from middle management just before the weekend.
“Today has been the last day of Doughnut Time,” Victoria state manager Vanessa Gaddi-Chmielewski wrote.
“I just received the news from [company chief executive] Dan [Strachotta] that the deal with the new company has been blocked by [founder and director] Damian [Griffiths].
“He will not sign the Doughnut Time trademark to Dan.
“As a result, the entire company will go into liquidation — including the stores that Dan was supposed to take over. The sale has not been completed.”
This prompted an outpouring of strong reactions from aggrieved Doughnut Time staff, who have since been demanding answers from unresponsive senior management.
Mr Griffiths has not been responding to their emails or phone calls.
Likewise, Doughnut Time’s former employees have been unsuccessful in reaching Mr Strachotta.
The ABC has contacted Mr Griffiths and Mr Strachotta several times, but neither have responded to requests for comment.
Redress for unpaid workers
“The company has cashflow problems and couldn’t pay its employees. That seems to be the main reason for the collapse,” Mr Caspaney said.
Mr Caspaney suggested one avenue for workers “if their debt is less than three months old”.
These workers can seek compensation from the Fair Entitlements Guarantee (FEG), the Australian Government’s fund for employees who have lost their job as a result of their employer’s liquidation or bankruptcy.
Workers will be able to claim up to 13 weeks of unpaid wages, plus the outstanding value of their annual leave and long service leave.
Essentially, this is compensation funded by Australian taxpayers’ money.
But there is one important restriction — the FEG compensation is only available to Australian citizens and permanent residents.
A number of international students and workers from overseas contacted the ABC to share their stories about being owed thousands of dollars in debt and never being paid superannuation.
Unfortunately, they will not be entitled to the FEG scheme.
Furthermore, it seems unlikely that these unprotected workers and other unsecured creditors will be paid as a result of the liquidation process.
Mr Caspaney, from his analysis of Doughnut Time’s accounts so far, said “there is no money anywhere”.
If you have information about unlawful workplace practices, you can contact us anonymously.
Or if you have concerns about your work conditions, you can contact the Fair Work Ombudsman.