A prominent Dunedin catering company got the sense things were not going well for Recharge Enterprises Ltd, which operated Clyde’s former Recharge Bar and Cafe, and took action.
The cafe has been sold and the company owes about $418,000.
Kaan’s Catering Supplies — listed as a potential secured creditor — took steps to reduce its risk of exposure which, in the end, meant it was owed "a big fat zero", general manager Peter Deans said.
"There'll be other businesses out there that won't be as fortunate as us."
Recharge Enterprises ceased trading and was placed into liquidation last month.
The company’s sole director, Gareth Watt, told the Otago Daily Times the liquidation and closure were "old news now" and did not respond to a further request for comment before deadline.
Mr Deans said Kaan’s, a couple of months before the liquidation, "had a sense that things weren't travelling that well".
There were a couple of times where the company had dishonoured its direct debit agreement — "a bit of a red flag".
Kaan’s put it on to a credit-only account which meant it needed to have money on its account to buy product.
"Which turned out to be quite opportune at the time, with what's since happened."
Kaan’s had been trading with Recharge Enterprises for nearly 18 months "before they hit the wall, so to speak", Mr Deans said.
It was never a good thing for companies like Kaan’s when hospitality businesses closed, especially ones based in small townships such as Clyde.
"I think what's possibly happening is there is a little bit of rippling maybe from the North Island down to the South Island in that hospitality sector.
"Hopefully it will never get to the stage where it did in the North Island."
The Christmas period had been a busy one for a lot of businesses.
"When you're busy, sometimes you're not always watching all your costs and things like that.
"If you do have a very successful year, then, unfortunately, the tax man has got his hand out for some money as well."
The liquidator’s first report, released last week, said the business had been sold.
Failure to pay tax was the reason given for the liquidation.
A Ministry of Business, Innovation & Employment spokeswoman confirmed creditor claims were an estimated $418,470.38 in total.
The cafe’s closure was announced on social media earlier this month and separate business Duo Cafe is now operating from the former Sunderland St premises.
In late 2024, Mr Watt was ordered to pay more than $17,000 to a former worker for wrongful dismissal.
