Masterchef winner Jamie Scott has promised his Broughty Ferry restaurant Sandbanks Brasserie will remain open after his company which owned it was forced into liquidation.
Raliad Ltd, which owned Sandbanks, has been put into liquidation after accruing more than £120,000 of debt.
Mr Scott and his wife Kelly acquired Raliad Ltd in May 2023 from Rachel Newth, whose husband Adam previously ran the Brook Street venue as The Tayberry.
A combination of poor trading at the start of this year, rising costs and historic debt led to the decision to fold Raliad, with Interpath Advisory appointed liquidators.
The restaurant and the assets of the company, including its employees, were transferred to a related entity.
Mr Scott says this means the restaurant will continue to operate and none of his other ventures have been affected.
It follows the shock closure of his award-winning Newport restaurant earlier this year.
He told The Courier he was unaware of the debts Raliad had when buying the company in May 2023.
Mr Newth refutes these allegations, saying the celebrity chef “knew what he was buying”.
How Sandbanks can continue
A new report published by liquidators Interpath outlines the demise of the business.
It said: “It became apparent some months after acquisition historical creditors dating back to 2022 had not been settled, and there were also significant amounts due to the landlord and utility providers.
“The directors negotiated repayment plans with the historical creditors, however, it became increasing difficult to adhere to the agreed plans as the company’s overheads, specifically foods costs, labour and utilities increased significantly during 2023.
“It became apparent after exceptionally low trading in the first quarter of 2024 the company could not continue to service the historical liabilities.
“Consequently, in April 2024, the business and assets of the company, including all of the employees, were transferred to a related entity and the company ceased trading.”
Raliad was wound-up voluntarily last month.
A tax bill of more than £84,000 is due to HMRC, while just short of £42,000 was owed to unsecured creditors.
This includes more than £21,000 to John Henderson Ltd, a meat supply company in Fife.
‘Harsh business lesson’ for Jamie Scott
Mr Scott claims the scale of the debt had not been fully revealed to him.
Coupled with the closure of The Newport, Jamie says the experience had been a “harsh business lesson” for him.
“We were not aware and these debts have continued to come to light over the last year,” he said.
“We did as much due diligence as time allowed, prior to taking over with our accountants and did a lot based on trust and honesty.
“However this has not worked out in our favour unfortunately and is another harsh business lesson to face and learn from.
“We were on the back foot from the off, we tried to keep up however more and more appeared nothing has been as it was set out.”
Claims Scotts ‘knew what they were buying’
But these allegations were rejected by former owner Adam Newth, who also spoke to The Courier.
He said: “When Jamie bought the business, we worked together to get the deal over the line.
“We even used the same accountants.
“The price he bought it for was low, which reflected the debt. We had disclosed this during the buying process.
“All in we only received £2,000. We are now listed as a creditor to Raliad.
“The business was sold fair and square and they knew what they were getting, including the debt.
“I had decided the time was right to get out of the industry. Faced with rising costs, including a rent increase.
“And I made sure they were aware of this. There was complete transparency.
“The kitchen had been refurbished. The oven alone was worth £20,000, and the hundreds of thousands of pounds invested over the years.”
‘Heart-breaking’
Jamie Scott says it is “heart-breaking” seeing so many restaurants and bars going under.
“There are a lot of good people and businesses which are performing under huge pressure due the lack of support from the government, or have simply been unable to sustain their businesses.
“It’s heart-breaking to see friends in industry close due to these circumstances and we ourselves were no different at The Newport restaurant.
“We are diversifying as an industry more than ever.
“The support is there from customers, online and in person where they are able to, but the cost of living crisis affects all and we have to be understanding that meals-out are often first to be cut back or all together.
“We say we value hospitality and what is does for our local areas, tourism and labour markets.
“However we have never been less supported, under more financial pressures, more scrutiny and still expected to perform flawlessly across the board.
“Of course no single avenue will save the day, but anything at this point would contribute more positively than no support at all.”
Hospitality trade sounds warning
Hospitality has endured a torrid time of late, with a number of restaurants, bars and cafes being shut-down.
It comes as the Scottish License Trade Association (SLTA) released the results of their summer survey.
They said despite the uplift from Euro 2024, 62% of outlets reported trade being down versus last year.
Rising costs are an increasing challenge – 77% of venues are seeing 10% increases, versus 30% in our January survey, they added.
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