1800 Lasagne the Pandemic Favorite Went Insolvent Just Five Months After Opening
1800 Lasagne, a notable name in Melbourne’s dining scene, has recently plunged into insolvency just five months after opening its restaurant. The business, recognized for its signature baked pasta dishes, began its journey as a home delivery service in 2019. Initially gaining popularity through word of mouth, the establishment thrived during Melbourne’s COVID lockdowns in 2020.
Timeline of Events
- 2019: 1800 Lasagne starts as a pre-ordered home delivery service.
- 2020: Gains popularity during COVID lockdowns.
- November 2020: Opens a restaurant on High Street, Thornbury.
- 2024 Financial Year: Reports sales of $3.8 million.
Business Growth and Challenges
Despite initial success, 1800 Lasagne struggled to manage its expenses, facing annual losses since its inception. According to liquidator reports, the business traded while insolvent for four and a half years. The directors are potentially liable for approximately $2.7 million in debt incurred during this period.
Contributing Factors to Insolvency
The reasons cited for the downfall of 1800 Lasagne include:
- Undercapitalization and difficult trading conditions.
- Inflation and increased cost of living.
- Failed expansion efforts.
- Unpaid historical tax liabilities.
Legal Implications and Financial Recovery
The liquidator has pointed out that directors may have repaid themselves ahead of creditors. This situation raises issues of “unfair preference payments.” The federal government is stepping in to cover part of the $390,000 owed to employees, primarily concerning unpaid superannuation.
Further complicating matters, the Australian Taxation Office has initiated legal action against one of the directors, holding them accountable for $423,000 in unpaid taxes associated with 1800 Lasagne.
As the hospitality industry continues to face challenges, 1800 Lasagne’s story serves as a cautionary tale of the impacts of financial mismanagement and the importance of sustainable business practices.
