Adelphi hotel checks out as taxman takes action over unpaid debts
The avant- garde 35-room hotel, a favourite of hip travellers, is renowned for its edgy design and the glass-bottom, 25-metre pool that juts out over Flinders Lane nine storeys below.
Its owner, the Gabriel Hotels Group, was placed into official liquidation by court petition from the ATO, reportedly over debts of about $150,000, Rodgers Reidy Chartered Accountants principal Gary Fettes said.
Mr Fettes said the hotel had struggled because of the global financial crisis and the complex strata-title ownership of the building it operated in.
Several floors are owned by different entities and some rooms are owned by private parties. "We will ask the ATO to lodge proof of debt," he said. "We are going through the process of trying to get someone to come in and run it again."
The Adelphi was designed by award-winning Melbourne architects Denton Corker Marshall more than 20 years ago and constructed within an old inner-city warehouse. At the time, it was hailed as a prime example of urban renewal.
Gabriel Hotels Group director Damien Hodgkinson rescued it from bankruptcy in 2006.
In an effort to attract more business, his company upgraded the interior's angular industrial design, installing a spa and blue-tiled Turkish steam room on the ninth floor.
Frequently Asked Questions about this Article…
The Adelphi Hotel on Flinders Lane closed its doors last Friday after the Australian Taxation Office applied to have its owner placed into official liquidation, forcing the 35-room boutique hotel to cease operations.
The hotel was owned by the Gabriel Hotels Group. The company was put into official liquidation after a court petition from the ATO reportedly over unpaid debts of about $150,000.
The ATO applied to the court to have Gabriel Hotels Group liquidated over unpaid taxes. Rodgers Reidy Chartered Accountants principal Gary Fettes said they will ask the ATO to lodge a proof of debt as part of the liquidation process.
The hotel operates inside a building with complex strata-title ownership — several floors are owned by different entities and some rooms are privately owned — which complicates management, creditor recovery and potential restructuring or sale.
According to Gary Fettes, the hotel struggled because of the global financial crisis and the complications arising from its complex strata-title ownership, despite earlier efforts to upgrade facilities to attract more business.
With Gabriel Hotels Group in liquidation, the liquidator and advisers will manage creditor claims; specifically, Rodgers Reidy said they will ask the ATO to lodge a proof of debt while the process to settle outstanding claims and decide the hotel’s future proceeds.
Yes. Gary Fettes said they are going through the process of trying to get someone to come in and run the hotel again, so a new operator or arrangement could emerge as the liquidation process progresses.
This case highlights risks relevant to investors in hospitality or property: tax debts can trigger liquidation, economic shocks like the global financial crisis can hurt revenue, and complex ownership structures (strata-title) can complicate recovery or resale — so check financial health, ownership structure and tax exposure before investing.
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