Jon Adgemis once planned to rule Sydney nightlife: Owing $1.5b, he’s desperately fighting bankruptcy

A couple of years ago, Jon Adgemis was seen as a potential rival to Sydney’s great hospitality entrepreneur, Justin Hemmes.

Next Friday, the model-dating, Maserati-driving pub owner faces his creditors, who will choose either to bankrupt the 46-year-old or accept a token contribution to the $1.5 billion they’re owed.

The vote, a choice between vengeance and pragmatism, will legally formalise the downfall of a man who, with little more than flashy suits and chutzpah, ran up debts worthy of a billionaire.

He used the money to buy some 20 pubs and hotels over fours years using cheap, pandemic-era debt. He ordered expensive refurbishments, hoping to attract Sydneysiders similar to himself: Instagram-posting socialisers who love expensive food, high-end liquor and luxury clothing labels.

Mr Adgemis’s public relations turned out to be better than his business skills. Even those who followed him closely were surprised he was able to borrow $1.4 billion in a personal capacity.

A block in Hurstville, an inner Sydney suburb, worth $4.5 million was used as collateral for $134 million of debt, including money owed to Carlton & United Breweries for beer supplied to Mr Adgemis’s pubs, according to a report published this week by the insolvency firm in charge of his financial affairs, WLP Restructuring.

Helping out

Despite the humiliation of accountants sifting through his closet for valuables (they concluded his designer suits wouldn’t raise much, if anything), Mr Adgemis hasn’t fled Sydney. He has stayed to finish work on four hotels and a Bondi Beach hostel, Noah’s Backpackers, which could be sold on behalf of his creditors.

“He’s totally f..ked us but he hasn’t walked,” said George Fleming, whose investment management business, GEMI, is owed approximately $400 million. “He is trying to get the best result for all creditors.”

He said Noah’s, which was bought for $68 million in 2022, could be worth $130 million when its conversion to a three-star hotel is finished this year.

Creditors are split over whether to accept a deal offered by Mr Adgemis.

They would get $2.6 million, instead of probably nothing. He would avoid bankruptcy, which imposes tough restrictions for three years, including seeking permission for international travel and being restricted to owning a car not worth more than $9600.

Losing less

Some of the lenders are in a better position than others.

Known as “secured creditors,” they will be paid first from the proceeds of the five hotels. WLP Restructuring, which said the secured creditors would get all their money back, hasn’t put a value on the projects. GEMI and Deutsche Bank, which is owed $370 million, have some secured debt.

The vast majority of the 78 people and companies owed money are unsecured creditors. It looks like they will get nothing in either outcome.

Among them is a Monaco-based clothing manufacturer, Richard Gazal, who is owed $27.7 million. Mr Gazal has filed one of 10 lawsuits against Mr Adgemis, and seems determined to bankrupt him.

The tax office is owed $80 million and is expected to vote for bankruptcy, according to Mr Fleming, who said his company had not decided how to vote. The tax office declined to comment.

“One of the problems we have is all our lenders would be angry with us if we don’t put him in bankruptcy,” Mr Fleming said.

Lifestyle

Mr Adgemis, who couldn’t be reached for comment, hasn’t apologised or explained what went wrong.

A list of his possessions published by the insolvency experts makes him look like a man who wanted to appear wealthier than he was.

Living in Point Piper, he drove a 2022 Range Rover worth $230,000 and a 2021 Mercedes-Benz G63 AMG worth $240,000. Both cars have heavy debts on them.

The rest of his possessions are worth around $30,000. There is no expensive furniture, jewellery and only two artworks. One is a photo titled “Love Hurts” of a nude woman holding a sea urchin in front of her groin. He has no superannuation.

Mr Adgemis’s main asset appears to be the generosity of a friend. He is living rent fee in a converted office in Bondi Beach at a cost of $60,833 a month, a sum the tabloids have said is covered by Sydney fund manager Will Vickers, who did not respond to a request for comment.

If bankrupted, the rental assistance might legally be regarded as income. Mr Adgemis would be required to give half to his creditors for three years. Where the money would come from is unclear, although family members have promised $3 million to avoid bankruptcy.

WLP Restructuring asked for the source of the money. The firm was told a sister received money from a divorce settlement.

“We have requested documents confirming the above, but no response was received as at the date of this report,” the firm told creditors this week.

Mr Adgemis’s fate will be determined in a hotel function room named after one of Sydney’s establishment figures, Sir James Fairfax.

The Fairfax media business ended in insolvency too, although it took five generations to get there. Mr Adgemis is about to achieve that feat in one.