Unsecured creditors of NZ Karen’s Diner unlikely to see money

Karen's Diner was billed as an interactive experience with rude wait staff insulting diners. Photo / Supplied

Unsecured creditors of the entity behind the now-closed local Karen’s Diner restaurant aren’t likely to receive anything from its liquidation.

A liquidator’s first report showed the NZ entity owes at least $30,000. Its parent across the Tasman, which collapsed at the end of May, reportedly owes over A$4 million ($4.29m).

Last week, BWA Insolvency’s Bryan Williams was appointed liquidator of Viral Ventures NZ.

The entity operated the sole Karen’s Diner outlet in the Auckland suburb of Mt Eden, which according to its Instagram opened in August last year.

The global chain grew in popularity with restaurants built around the premise of “Karen” staff members insulting customers.

The company had more than 1.5 billion TikTok views and millions of social media followers since opening two years ago.

Williams’ appointment to the NZ business comes a month after its Australian parent collapsed with Wexted Advisors’ Chris Johnson and Andrew McCabe appointed liquidators.

At the start of 2023, the chain reported it had 19 Karen’s Diner locations across Australia, NZ, the United Kingdom and the United States.

Gone under

In his first liquidator’s report, Williams said the director, who is listed as Aden Levin, told him the combined impact of costs of operation and the reduced sales resulted in negative trading.

“The trading deficiency was being supported by the parent company until it was decided to withdraw continued support.”

As of July 4, the company’s liabilities stood at $34,449.

Williams told BusinessDesk the restaurant had closed with plant and equipment already pulled from the site.

Given the valuation of the assets, which was listed as “to be determined”, Williams noted in his report unsecured creditors weren’t likely to see any money.

More than 25 creditors were listed in the report, including Inland Revenue, commercial kitchen cleaners Cookright and employees.

Financial records showed Lion NZ, Hancocks Wine, Spirit and Beer Merchants and BOC Limited held security over the entity’s assets.

Williams anticipated the liquidation would be completed within six months.

Several Australian media outlets on Monday reported that Viral Ventures across the ditch owed A$4.3m with 56 creditors lodging claims.

-BusinessDesk

Riley Kennedy is the New Zealand Shareholders Association emerging journalist of the year, 2022. Riley’s journalism experience includes more than a year as a business specialist at the Otago Daily Times. He has a diploma in journalism from Wintec.