Creditors have approved an $850,000 rescue deal to prevent Perth’s historic Royal Hotel from being placed into liquidation, allowing the central business district venue to continue trading.
The proposal was put forward by the Parker Group, whose businessman owner John Parker operates The Royal Hotel, Busselton Pavilion and Ciao Dandy in Karrinyup.
Creditors of Wellington Pty Ltd, the company behind the Royal Hotel, accepted the arrangement on Thursday morning. Administrators Jack James and Paula Smith, of Rodgers Reidy, estimate the company owes about $3 million.
The tax office is owed approximately $2.4 million, making it the largest creditor. Under the rescue deal, creditors are expected to receive 22 cents for every dollar owed.
The hotel was built in 1882 on the corner of William and Wellington Streets. Parker spent $13 million restoring the venue in 2019.
Royal Hotel creditors faced receiving nothing in liquidation
In a report filed on September 10, the administrators said creditors would have received nothing if Wellington Pty Ltd had been liquidated.
They also found “there was a strong indicator” that the company had been insolvent since at least January 2024, with about $2.2 million in debt potentially incurred after that date.
The report said a liquidator could investigate whether there was a claim against Parker for insolvent trading and seek legal advice on possible action.
However, the administrators said Parker was unlikely to have the funds to meet a successful claim. “It would indicate that the (Parker) would not have the financial capacity to meet a judgement debt (if successful),” they wrote.
The Parker Group’s Busselton Pavilion and Ciao Dandy businesses remain under separate voluntary administration.
