Cameron Gray and Anthony Elkerton of DW Advisory were appointed administrators in December, with more than $840,000 owed to the Tax Office, about $36,000 to the printing company Blue Star Web and a slew of smaller creditors including wine names such as Peter Bourne, Nick Stock, Jeremy Oliver and former Gourmet Traveller editor Andy Harris.
Creditors accepted a deed of arrangement to be paid 10c in the dollar of their original debt in February and then in May agreed to extend the terms because of the coronavirus pandemic.
Africola head chef and co-owner Duncan Welgemoed is owed just under $5000 for hosting a GT Wine dinner in October last year after the organisers were unable to settle the bill on the night. He said Mr Sarris was apologetic and promised payment within a few days but then ceased contact, while the magazine went on to host dinners at other restaurants.
“He stiffed me out of a bill and continued to rort restaurants – and restaurants are some of the most fragile businesses in Australia – and he was happy to do it without giving a f**k basically,” Mr Welmegoed said. “That’s money from our kids’ mouths.”
Mr Sarris said he could not comment as he was not sure which restaurants had not been paid. “As far as I’m concerned we’re running events on a regular basis over a number of years,” he said.
Many contributors still have an ongoing relationship with the magazine and would not talk on the record, with one pointing out that had the magazine stayed with its former owners, Bauer Media, it probably would not have survived the German publisher’s recent cull of titles.
Judy Sarris has been editor of GT Wine since 2003 when it was owned by ACP and then continued when Bauer Media bought ACP from Nine (now publisher of this masthead) in 2012. Bauer sold GT Wine in 2015 and the magazine is owned 20 per cent directly by Judy Sarris and 80 per cent by the Sarrises jointly through a holding company, Spud Media Investments.
The Sun-Herald has been told freelance writers and photographers have withheld work to force invoices to be prioritised and Sydney restaurants have threatened to cancel events because deposits had not been paid. Judy Sarris is said to tell contributors Stan handles the business side and she knows nothing about it. It is understood staff and contributors are mostly being paid at the moment but many will no longer work for the title having been burned once too often.
Judy Sarris said she agreed the ideal word count and approximate fee when she commissioned contributors and they would usually expect to be paid for previous work before taking on new assignments.
“While I endeavour to be as helpful as possible, I do not have access to the banking and do not make payments, so I do have to refer writers to accounts department, which is off-site, or to Stan,” she said.
Mr Sarris said the company fell into difficulties because advertisers were not paying on time, affecting cash flow. He said the business was healthier after restructuring, including terminating the lease on its office space in Surry Hills and moving into the area downstairs at a time when most magazine staff are working from home.
The downstairs space was originally earmarked for a wine bar. Mr Sarris said he had been paying rent for it since 2018 and used it sporadically for events but he was glad he did not open the wine bar given what happened with the coronavirus. He instead plans to open a bottle shop.
He rejected the suggestion it was extravagant to pay for empty space for so long. “That’s not extravagance, you’re building businesses, you have concepts and ideas, and you go out and develop them, but sometimes it doesn’t go to plan.”
Mr Sarris said the company had also identified new revenue streams, opening an online wine shop, and had shifted its events to an online format. The GT Wine dinners that left restaurants like Africola in the lurch have been unable to operate during the pandemic, but the magazine in June hosted a virtual wine tasting of pinot noir with actor Sam Neill, the owner of Two Paddocks winery in New Zealand.
Yet the company faces a looming deadline, with the first instalment to creditors due within three months of the automatic repeal of the government’s coronavirus economic response package, currently due in September.
The company will also be affected by the phase-out of JobKeeper, with payments set to reduce in late September and again from the end of December. Mr Sarris confirmed staff were on JobKeeper but said his forecasting indicated the business would continue to trade after the program ended.
Around May GT Wine Magazine also lost the lucrative contract to publish Vintage Cellars magazine to News Corp-owned Medium Rare Content Agency. Some sources say this would be the “nail in the coffin” for the business but Mr Sarris said the company had developed other revenue streams.
In the 1990s Mr Sarris and Mr Adler, the former FAI Insurances chief who later served jail time for his conduct as a director of HIH, founded a company called Eaternity with plans to open a string of chic restaurants and bars across Sydney.
The pair opened top Sydney restaurant Banc in 1997, an establishment that was never far out of the gossip columns and provided the training ground for many successful chefs, such as Justin North, Matthew Kemp and Darrell Felstead. In 1999 the pair opened GPO, an ambitious food hall, restaurant and bar operation in Martin Place.
But Eaternity collapsed in 2002 owing $4.5 million, after Mr Sarris had earlier bought out Mr Adler. Mr Sarris lost control of GPO to Peter Petroulas around this time but continued running Banc and Wine Banc through a new company, 53 Martin Place.
A year later Mr Sarris also placed Banc into voluntary administration, though the wine bar continued to operate.
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Caitlin Fitzsimmons is a senior writer for The Sun-Herald, focusing on social affairs.
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