A protracted dispute over the sale of the Empire Hotel in Annandale has precipitated the collapse of Sydney hospitality figure Jon Adgemis’s once-expansive pub portfolio.
It was reported in The Australian, that administrators Korda Mentha and receivers McGrath Nicol have taken control of five of Adgemis’ venues after lenders withdrew support, marking a dramatic unravelling of the Public Hospitality Group. At its height, the group operated 22 venues across Sydney and Melbourne, largely financed through private credit. Now, Adgemis faces not only the loss of his hospitality empire but also looming personal bankruptcy that could exceed $1.8 billion.
According to The Australian’s sources say tensions over the Empire Hotel sale exhausted creditors’ patience. Lenders, including Deutsche Bank and GEMI Investments — which together invested more than $770 million — had pressed Adgemis to divest the property. However, a proposed deal collapsed, prompting decisive action.
The five venues now under receivership include the Empire Hotel (Annandale), Hotel Diplomat (Potts Point), Claridge House (Darlinghurst), The Exchange Hotel (Balmain), and the South Bondi Hotel (formerly Noah’s Backpackers). Administrators plan to complete unfinished renovations at these sites before moving to sell them.
Construction work is ongoing at several properties, though progress has been hampered by disputes with contractors and lenders. Meanwhile, Adgemis has continued overseeing developments while maintaining a costly personal lifestyle, including paying nearly $60,000 a month for a Bondi penthouse — a matter flagged by the Australian Taxation Office as a possible concern for bankruptcy trustees.
McGrath Nicol confirmed it would continue operating the Empire Hotel and Hotel Diplomat during the process and is preparing a sales strategy for both venues, describing them as “iconic” and likely to attract strong interest.
Separately, the ATO has stepped into Adgemis’ bankruptcy proceedings as lead petitioner, citing outstanding personal tax liabilities exceeding $150 million and additional company tax debts potentially topping $300 million. A Federal Court hearing is scheduled for October 3 to decide on his bankruptcy.
Efforts by Adgemis to stave off bankruptcy — including a proposal to offer creditors just 15 cents in the dollar — have failed to gain traction. With creditors now losing confidence, the final chapters of Public Hospitality Group’s collapse appear to be underway.
