The hospitality group founded by former Australian rugby player George Gregan and his ex-wife Erica Gregan has been placed into administration, largely driven by the end of JobKeeper and leasing protections.
Following the appointment of SV Partners director Ian Purchas as administrator late on Friday, GG Leasing closed two of its nine outlets and reduced the number of its employees from 65 to 55.
The hospitality group operates the Sydney Opera House Green Room, GG Espresso, The George Bar and Bistro, and Eagle Lane Bistro among others.
Purchas says GG Leasing’s director Erica Gregan is determined to see the company through the voluntary administration process, and that he is “comfortable” it can be achieved.
“It’s no surprise to anyone that hospitality has been doing it tough in the last 12 months, and in particular in CBD areas where there has been lockdowns,” Purchas tells SmartCompany.
Purchas says there is “no doubt” the end of JobKeeper and the end of the leasing code of conduct contributed to the administration.
The federal government established the commercial leasing code of conduct at the start of the Covid-19 pandemic, which was then administered by the states and territories.
The code prevented landlords from terminating leases due to non-payment of rent and required landlords to offer tenants reductions in rent that were proportionate to the decline of a tenant’s turnover.
While some states have already withdrawn the code, landlords in New South Wales and Victoria will not have to abide by the code from March 28, the same day JobKeeper ends.
Purchas is confident the 23-year-old business will keep two of its remaining businesses and is currently engaged in negotiations that will influence the future of the remaining stores.
He is hopeful that six of GG Leasing’s current stores will continue trading after the administration process is complete.
The hospitality group has more than $1 million in debts, however, the full extent of the debt will depend on the the size of the claims filed by the landlords.
The company’s main creditors include landlords, the Australian Taxation Office and related parties. Debts owed to suppliers have been kept to a minimal amount, Purchas says.
GG Leasing co-founder George Gregan was the captain of the Wallabies between 2001 and 2007 before he set up the business with his then-wife Erica Gregan in 1998.
This story originally appeared on SmartCompany, and has been republished with permission.