The companies behind Auckland food business Bake & Beans were unable to survive so liquidator Pritesh Patel has been appointed. Photo / Bake & Bean
The companies behind Auckland food business Bake & Beans were unable to survive so liquidator Pritesh Patel has been appointed. Photo / Bake & Bean
A liquidator has cited 10 reasons for the financial failure of a group of Auckland food companies employing 35 staff but their jobs continue while he tries to sell the businesses.
Pritesh Patel of Patel & Co said the companies, trading under the Bake & Beans logo, suffered setbackswhich they could not recover from.
All 35 staff are continuing to work for the businesses while he tries to find a buyer.
Ten reasons for the financial struggle are:
Cost of raw materials rising;
Competitive market;
Increased costs due to wastage of finished goods;
High labour costs;
Traffic issue and reduction in car parking due to road works;
Staffing issues;
Economic downturn;
Covid-19 pandemic and three lockdowns causing a severe impact on the hospitality industry;
“The combined effect caused the company to have negative cashflow issues which meant that it could not sustain attending to its fixed and variable business expenses, nor its tax obligations when they fell due,” Patel wrote.
The companies behind Auckland food business Bake & Bean has failed. Photo / Bake & Bean
Patel was apppointed by Guddo Khan and Shally Rana, directors and shareholders of S S Bakers, Z M R Foods and Cheetal Foods.
Patel said he was working with lawyer Shaheen Azmi.
The two met with staff last Tuesday to let them know about the situation.
Patel told the Herald: “They made gourmet pies and cakes and savouries. It was a very big operation with 35 staff and one franchised store.”
One franchised business is unaffected.
Thousands of dollars in holiday pay and wages are owed.
“The welfare of the employees - approximately 35 - was paramount and some of these employees have work visas attached to this company.
Pritesh Patel is a liquidator. Photo / Patel & Co.
“It is anticipated that the business will be sold as a going concern with very minimal disruption for all parties concerned and with the support of the landlord,” Patel’s initial liquidation reports on the businesses said.
Cheetal Foods alone owes $196,000 in holiday pay to staff and a further $9000 in wages.
That company owes IRD $399,000.
How much money could be realised by selling the companies is regarded as commercially sensitive so has not been stated in the accounts.
Total assets are also listed as commercially sensitive.
Coca-Cola Amatil (NZ), Finance Now of St Luke’s, Inland Revenue and the Accident Compensation Corporation are among the list of creditors.
ASB Bank, Bank of New Zealand, Heartland Bank, Bidfood, hotel owner C P Group of Queen St, Davis Trading Company and George Western Foods NZ are also listed as creditors.
Combined, the companies have an initial estimated $1.3m deficiency of liabilities over assets.
The estimated statement of affairs as at last Tuesday is:
Cheetal Foods has a $734,000 estimated deficiency of liabilities over assets.
Z M R Foods has a $553,000 estimated deficiency of liabilities over assets.
S S Bakers has an estimated deficiency of $88,000.
Patel said a quick assessment had been made and the decision taken to continue to trade the business to maintain normalcy for staff as well as preserving goodwill.
He controls the companies and all income and outgoings are managed by his office.
He hopes for minimum disruption for all parties, and cited the support of a landlord.
So far, no offers have been presented to Patel from potential buyers.
Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.
