The sale of Doughnut Time has been axed as founder Damian Griffiths has refused to sign over the trademark over to former CEO and managing director, Dan Strachotta.
As reported last week, Strachotta was planning to purchase the company and save the remaining stores.
According to ABC, the chain went into voluntary administration on Friday 9 March, appointing Michael Caspaney from Menzies Advisory as the liquidator.
All Doughnut Time stores have closed, with staff owed up to $200,000 in unpaid wages.
Disgruntled staff members have set up a GoFundMe page, with the goal of raising $200,000.
Workers were informed of the company’s liquidation via email from Victoria state manager Vanessa Gaddi-Chmielewski.
“Today has been the last day of Doughnut Time,” she wrote. “I just received the news from Dan the deal with the new company has been blocked by Damian. He will not sign the Doughnut Time trademark to Dan.
“As a result: The entire company will go into liquidation – including the stores Dan was supposed to take over.”
Former employees have been unable to contact Strachotta or Griffiths regarding the closure of the stores or their unpaid wages.
ABC spoke with administrator Caspaney who says “there is no money anywhere” when asked about his analysis of Doughnut Time’s accounts.
“The company has cashflow problems and couldn’t pay its employees,” he says. “That seems to be the main reason for the collapse.”
Workers are encouraged to contact the Fair Entitlements Guarantee to claim unpaid wages if “their debt is less than three months old”, according to Caspaney.
Workers can claim up to 13 weeks of unpaid wages along with the outstanding value of their annual leave and long service leave.
However, compensation is only available to Australian citizens and permanent residents, not overseas workers.
A former Doughnut Time employee estimated 75 per cent of staff were international workers with visas, leaving them out of pocket.
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