A Melbourne garden store that’s a staple of Melbourne’s shopping scene is facing a $100,000 debt as a result of an alleged breach of trust by its parent company.
In March 2016, a letter was sent to the owners of the Melbourne Garden and Garden Club by a former manager who claimed the club was a “cash-cow” for the club’s parent company, the Garden Club of Melbourne.
The letter, which was sent from the Garden Clubs office in Melbourne’s inner west, stated the club had failed to make “reasonable payments” to the parent company over time and had become insolvent.
The Club of Victoria was told the debt was due to “serious breaches” of the terms of its agreement with the company, including not paying back the debt owed to the Club of Greater Melbourne and not paying for the Club’s operations, among other things.
The club is now facing a court hearing on the debt on Tuesday.
The Gardens Casino is owned by the Gardens Club of South Australia and has been a fixture of Melbourne since its founding in 1993.
The Melbourne Garden Club was formed in 1993 after the Club merged with the Melbourne Gardens Casino in South Australia.
The owners of Garden Club have denied the debt, saying the debt is owed to a “legacy entity” of their parent company and they have “never been involved with or engaged in any fraudulent conduct”.
“The Gardens Club’s parent has been unable to pay its debts to the Gardens Casino and has not been able to fulfil its obligations,” the club said in a statement on Wednesday.
“The Garden Club’s current financial position is under significant stress and it is in the best interest of the Club to sell its business and its assets to ensure it can continue to pay off its debts.”
It said the debt would be paid by a “small, diversified group of investors”, but that “there is no way of knowing” whether any investors would be interested in buying the club.
The company also said that it had recently begun negotiations with the owners to sell the club to another company.
Garden Clubs statement: “The Gardens Clubs board is committed to maintaining an open and transparent governance structure to ensure the club is financially stable and sustainable.”
The club also said it would “take any steps necessary to ensure a responsible transfer of the club into an orderly, private sector transaction”.
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