Losses laid bare: Deliveroo burnt $120m before collapse

At the time of collapse, Deliveroo had less than $1.6 million across NAB and Citi bank accounts.

It owes customers $238,000 in pre-paid Deliveroo Plus subscriptions, unused credit and unused gift cards, but the real figure is likely to be higher, the report stated.

Deliveroo owes restaurant partners $1.83 million, with Grill’d, Betty’s Burgers, Merivale Group, and Royal Stacks among the list. Its largest sum, $157,040, is owed to Tasmania-based burger chain The Goriller, trading as Boss Burger Co.

Deliveroo also fell behind on its rent, with landlords owed $81,092, the report showed.

The Transport Workers’ Union criticised Deliveroo for its gig economy model and leaving riders without a job.

“A modest payment will be made to riders but Deliveroo has left a trail of destruction in its wake, exploiting out-of-date laws to avoid paying workers what they really deserve,” said TWU national secretary Michael Kane.

“It’s critical the federal government moves urgently on its commitment to empower the Fair Work Commission to establish fair standards for transport workers to stabilise the industry, and protect workers’ job security and entitlements from corporate pirates like Deliveroo.”

What’s next?

At a virtual creditors’ meeting next Wednesday, KordaMentha will recommend creditors approve of the proposal put forward by Roofoods as preferable to liquidation. The proposed Deed of Company Arrangement (DOCA) would mean employees, riders, and suppliers receive payments from a pool of $9.5 million by the end of January.

A second payment, of about $9.3 million, would be made to lower-priority restaurant partners, customers and other unsecured creditors from April onwards.

Customers will be able to redeem 100 per cent on any unused refunds, credits, Deliveroo Plus subscriptions, or partially used gift cards under the proposal.

“We believe it is in the interests of creditors of the company to execute the DOCA,” the report states.

“The DOCA provides for payments to creditors by Roofoods over and above creditors’ statutory/legal entitlement for various creditor groups. These ex-gratia amounts are not available to creditors in the event the company is placed in liquidation.

“The return to creditors under the DOCA is more certain in quantum and timing when compared to the likely outcome in liquidation.”

If the DOCA is approved, KordaMentha will be paid $1.6 million for its administration services.

At the first creditors meeting in late November, former Deliveroo Australia CEO Ed McManus urged creditors to approve the DOCA.

“If the DOCA passes, this will mean that employees, who will soon receive your first payment, will get your second payment more quickly at the end of December. For riders, this will mean that you will receive the second half of the four-week compensation package being offered to you,” McManus said.

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