Any hope of salvaging something from the spectacular mess that was Doughnut Time is now gone for good, with the company going into liquidation and closing all remaining stores, leaving behind a staggering sum of $200,000 in wages owed to ex-employees.
Last week the company was thrown into utter chaos, with over half its stores abruptly closing amid a financial crisis that saw company founder Damian Griffiths attempt to hastily sell the business off to CEO Dan Strachotta in a bid to avoid serious legal calamity over a string of complaints to Fair Work made by employees.
Despite promises from Strachotta that he would buy the company and turn it around, it’s been revealed that the sale fell through at the last minute and, as a result, the company has been placed into voluntary administration with all remaining assets to be liquidated.
The final handful of employees who remained at Doughnut Time were not told by senior management of the company’s insolvency, which occurred on Friday.
Rather, middle management was left to relay the news on work-based scheduling apps, informing workers that they had all lost their jobs and that the company as a whole was done. Interestingly, screenshots from the app show that the reason for the total collapse of the company has to do with Griffiths reportedly blocking the sale of the company to Strachotta over an issue to do with trademark ownership.
Today has been the last day of Doughnut Time.
I just received news from Dan [Strachotta] that the deal with the new company has been blocked by 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 Dan was supposed to take over. The sale has not been completed. Doughnut Time will be put into the hands of appointed liquidators/administrators. We don’t yet know who they will be and what they will decide to do with the company.
We will all no longer be employed by Doughnut Time as it has come to an end and there will be no new contracts for anyone as Dan will not continue the company.
The announcement was met with anger from employees who have been demanding answers from senior management for weeks with no response. Neither Griffiths nor Strachotta have responded to calls and emails from employees, and they have refused to issue comment to the media on the matter.
The company does not have enough money to pay the reported $200,000 in owed wages to employees, leaving those owed money with no choice but to seek it through the taxpayer-funded Fair Entitlements Guarantee; a Federal Government-backed fund that helps employees who lose their job through liquidation or bankruptcy recoup owed wages.
Those with money pending can apply to the fund to receive up to 13 weeks of unpaid wages, along with any outstanding value of annual or long service leave. However, this fund is only available to Australian citizens and permanent residents. International residents and working holiday employees are likely to be left in the lurch with thousands of unpaid wages.Source: ABC News