‘They went to war with each other’: The rise and fall of a Sydney restaurant revolutionary

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The archetypal happening colleagues archer you astir Barry McDonald is helium knows however to alteration a restaurant. The 2nd is helium should beryllium obscurity adjacent managing one.

McDonald revolutionised Sydney’s nutrient country successful the aboriginal 2000s with his iconic concatenation Fratelli Fresh. The flamboyant restaurateur developed a sensation for watches, cars and good Australian creation successful the process. By 2010 helium was boasting of his reddish Porsche Carrera and a 50th day meal astatine Heston Blumenthal’s edifice The Fat Duck.

Now it has each travel crashing down aft the closure of his 2nd edifice successful arsenic galore years, with the 2 failures leaving a drawstring of suppliers owed tens of thousands of dollars, much than a cardinal dollars successful unpaid superannuation and allegations of theft from his erstwhile concern partners.

McDonald’s latest task Bar Grazie opened to beardown reviews successful Potts Point successful October 2022. The Good Food Guide’s main edifice professional Terry Durack praised caput cook Jarrard Martin for his lobster with champagne condiment and veal Vitello tonnato.

But beneath the wood-panelled aboveground occupation was brewing.

Exorbitant fit-outs, a spiralling wage measure and mounting debts to suppliers had taken their toll.

McDonald’s lavish spending connected intoxicant raised eyebrows among investors and staff. So had his usage of sugardaddy.com.

By January past year, Bar Grazie had lone 68 cents successful its account, according to a liquidator’s study by Cathro and Partners.

Martin estimates helium is owed $20,000. Suppliers accidental they are down up to $12,000. Two erstwhile concern partners enactment the fig astatine much than $200,000.

“He needs to beryllium held to account,” said Martin. “He doesn’t attraction who helium burns. To him, it’s conscionable business.”

In effect to questions, McDonald said helium was receiving attraction for crab and denied helium owed investors immoderate money, describing the allegations arsenic “incorrect and untrue”.

“You tin constitute immoderate you like, but I conscionable suggest that you marque definite it’s right,” helium said.

After The Sydney Morning Herald and The Age sent elaborate questions to McDonald past week, McDonald told The Daily Telegraph on Saturday that helium would wage $50,000 backmost to unit and suppliers erstwhile helium was healthy.

But helium did not code a bid of different allegations made by Martin and a twelve different employees, concern partners, colleagues and suppliers that this masthead spoke to for this story. Some requested anonymity to support their employment oregon investments. Others asked not to beryllium identified due to the fact that they are pursuing ineligible action.

The latest section of McDonald’s colourful vocation began little than 200 metres down the roadworthy from Bar Grazie astatine Cafe Giorgio successful 2018.

Nestled by the El Alamein fountain successful Kings Cross, Cafe Giorgio won investments from high-flying executives including erstwhile Myer seat Bill Wavish to service up al-fresco pizzas and Aperol spritzes connected the piazza.

But it floundered during the coronavirus pandemic and racked up superannuation debts of much than $1 cardinal to employees, according to an insolvency study by PCI Partners. When it closed successful mid-2022, it owed different $59,000 successful security payments and $12,328 to vino wholesaler Single Vineyard Sellers.

“It’s virtually arsenic if you went to the edifice and ordered $12,000 and conscionable walked out,” said Single Vineyard Sellers manager Stuart Leece. “It’s conscionable being stolen from.”

Wavish, who was besides the erstwhile main fiscal serviceman of Woolworths, said helium had nary concerns with however McDonald operated. “Barry’s got immoderate radical who don’t similar him,” helium said. “I don’t person immoderate antagonistic points of view.”

When liquidators arrived astatine Cafe Giorgio to measure what instrumentality could beryllium sold, determination was small near to recover. McDonald, who was the manager but not a director, had moved, packed and stored astir of the equipment, vino banal and furnishings to instrumentality to Bar Grazie, according to a statutory declaration signed by Martin.

Martin arrived astatine Cafe Giorgio’s done a proposal by Neil Perry. McDonald was Perry’s champion man. The brace had grown adjacent arsenic they moved up the ranks of Sydney’s cut-throat edifice country during the 1990s and 2000s.

In an email to McDonald successful April 2022, Perry backed the Bar Grazie menu, topped with Affettato Misto, rounded retired by Caccio e Pepe and finished with Mascarpone semifreddo.

“Mate looks good, if the room propulsion it disconnected radical volition travel for that,” Perry wrote.

Barry McDonald and Neil Perry successful 2010.

Investors accidental the endorsement from 1 of Sydney’s highest-profile chefs convinced them to stump up the currency to crook McDonald’s imaginativeness into a reality.

“I didn’t adjacent cognize helium had immoderate investors,” Perry told this masthead.

But dissimilar Perry, McDonald was not connected the directors’ lists of 2 of his caller venues. The 64-year-old ne'er revealed to investors that until March past year, helium was an undischarged bankrupt, according to documents filed with the Australian Financial Security Authority. Instead, helium signed a consultancy statement that handed him the day-to-day operations, without taking connected the concern risk.

Bar Grazie concern spouse Oliver Blades-Moore, a erstwhile enforcement manager with JP Morgan, said McDonald was similar “dealing with a stone star”.

“He had a spot of a endowment but needed cautious management,” helium said.

Fratelli Fresh astatine Bridge St successful 2012.

Blades-Moore said McDonald’s flair and an awesome interaction database made the edifice an charismatic concern opportunity. Bar Grazie was afloat erstwhile it opened successful October 2022.

“The archetypal week’s trading was perfectly phenomenal,” helium said. “Barry has a knack for opening these places up and swooning well-paying guests. But the occupation was wealth was falling retired the bottom. His spending was retired of control.”

Within months superannuation stopped being paid to staff. Then the tips started disappearing from the safe.

“He utilized to instrumentality distant tips and clasp them for a period oregon two,” said room manus Diperashan Adhikari.

One erstwhile worker said successful mid-2023 McDonald owed $24,000 successful tips to staff.

‘He ever had those metallic fox bully looks. The hairsbreadth did the dense lifting.’

Mark Best, proprietor and cook of Marque

The worker confronted McDonald, who agreed to nonstop screenshots of superannuation payments and slope statements of wealth leaving his account.

Then wages started being withheld. “In hospitality by law, you person to beryllium paid connected a Thursday. But sometimes these guys did not get paid until the pursuing Monday,” the erstwhile worker said.

“He would conscionable virtually dump the wealth into his backstage relationship and past conscionable wage what helium saw fit,” helium said. “It was insane.”

McDonald went done 3 caput chefs successful 1 year. The chaos amazed the unit and investors lured successful by McDonald’s reputation. The Kiwi-born McDonald brought Tasmania’s King Island Dairy products to the mainland successful the 1980s.

‘He makes you consciousness important. He is charismatic. But helium has an ego the size of Australia.’

A erstwhile concern spouse of Barry McDonald

Then with his member Jamie, helium transformed neighbourhood effect and rootlike shops into foodie destinations: filled with porcini mushrooms, quinces and Cape Wickham Double Brie.

Mark Best, the proprietor and cook of erstwhile three-hatted Sydney’s instauration Marque, said McDonald was a visionary who combined large nutrient with Ralph Lauren-style charm.

“He ever had those metallic fox bully looks,” helium said. “The hairsbreadth did the dense lifting.”

By the 1990s helium had teamed up with Perry to motorboat Sails (now Catalina) successful Rose Bay. In 2004, his fusion of a gourmet market with a edifice reached its zenith astatine Fratelli Fresh.

Jamie and Barry McDonald astatine Fratelli Fresh successful Waterloo successful 2006.

“He throws astir Fratelli Fresh a lot. It was his assertion to fame,” said 1 erstwhile concern partner. “He makes you consciousness important. He is charismatic. But helium has an ego the size of Australia. He can’t tally a business. He conscionable uses different people’s wealth similar water.”

Two of the archetypal investors successful Fratelli Fresh: Les Schirato, the laminitis of the $250 cardinal Vittoria Coffee empire, and his member Jamie person watched connected successful daze arsenic McDonald added different half-a-dozen restaurants to his portfolio aft Fratelli Fresh was sold successful 2016. Fratelli Fresh is present owned by Quadrant Private Equity and has nary narration with its erstwhile owners.

At its highest successful 2010, the grocery-restaurant concatenation reached a turnover of $20 cardinal a year.

But McDonald’s usage of the institution coin, $50,000 successful parking fines successful 1 year, a $53,000 recognition paper bill, $14,000 successful idiosyncratic information and regular weekday lunches with $300 bottles of Barolo wine, alarmed immoderate investors.

McDonald’s member Jamie says helium has not seen him successful 15 years. “It surprises maine helium has been capable to pull continued concern with each these failed establishments,” helium said.

“I and the different shareholders mislaid implicit spot successful Barry,” said Schirato.

The laminitis of Vittoria Coffee Les Schirato.

Former Fratelli Fresh Cafe Sopra enforcement cook Andy Bunn said helium did not get superannuation for much than 4 years. Bunn says immoderate of that was repaid aft helium confronted McDonald but estimates helium is inactive owed much than $200,000 successful mislaid wages.

“He is what helium is, and helium ever volition be,” said Bunn. “He conscionable tries to get distant with arsenic overmuch arsenic possible.”

So wherever does the wealth go?

“Where bash you reckon a narcissistic wanker puts immoderate disposable cash?” said 1 erstwhile concern partner.

One Bar Grazie spouse said helium was putting successful $7000-a-week to support the concern afloat portion McDonald drank the profits.

“He conscionable sat determination brazenly connected the piss connected a Tuesday afternoon,” said Blades-Moore. “Barry’s appetite for booze and young women was perfectly disconnected the charts.”

One bartender said Bar Grazie looked amazing. “But helium ran it similar a Roman bathhouse,” they said. “He utilized to portion each the nett himself. Then helium blamed maine for having to bargain much gin to marque Negroni mix.″

By January 2023, Blades-Moore and 2 different investors had go truthful suspicious that they enlisted a “secret shopper,” the erstwhile wide manager of Riley St Garage, Julian Damjano, to find retired what was happening.

When they saw the receipt for Damjano’s $475 repast they were shocked to observe the measure had not been enactment done the Bar Grazie EFTPOS instrumentality but done different outgo terminal linked to McDonald’s idiosyncratic account.

“I thought right, we person got the bastard,” said Blades-Moore.

The incidental broke each remaining spot betwixt McDonald and the investors. Two of the partners pulled the plug. Liquidators were called successful to unopen it down and retrieve the assets to conscionable the company’s debts.

But McDonald was not done with Bar Grazie.

“Whilst the valuer was undertaking the valuation of the spot astatine the Elizabeth Bay Road address, Mr McDonald attempted to interruption into the spot via climbing done the extracurricular awning of the premises,” the liquidator’s study said.

McDonald got a locksmith to alteration the locks, re-opened the edifice and enactment successful a caller income terminal. Blades-Moore drove past the venue the adjacent time connected his mode home.

“The tables are retired successful the street, the place’s beforehand doors are unfastened and Barry’s walking astir similar a canine with 2 dicks,” said Blades-Moore. “I was flabbergasted.”

Blades-Moore claims McDonald efficaciously stole the full restaurant. “There was astir $30,000 a week that went consecutive to his machine, whilst racking up debts successful our business,” helium said.

McDonald denies helium owes the investors immoderate wealth but did not respond to elaborate questions astir his spending oregon his relationships.

A photograph of a income terminal shows that McDonald’s relationship was not the lone 1 connected the receiving extremity of payments. Another EFTPOS instrumentality was sending payments to Greg Magree, the proprietor of the spot and an subordinate of Kings Cross fig John Ibrahim.

Magree was often seen astatine the barroom with McDonald. “He would beryllium adjacent to Barry and chat with him portion eating and drinking escaped booze,” said 1 bartender.

The erstwhile proprietor of the spot Greg Magree.

Unknown to the different investors, the brace had signed a abstracted lease statement to instrumentality implicit the property, contempt $75,000 successful assets including vino and different instrumentality belonging to the archetypal 3 Bar Grazie founders, according to the liquidator’s report.

Magree said McDonald approached him to instrumentality implicit the lease from the investors and that the edifice paid rent to him done the EFTPOS machine.

“Those guys went to warfare with each other, it was thing to bash with me,” Magree told this masthead.

NSW constabulary were called to the premises, but the investors were told determination was thing they could bash arsenic it was present a civilian dispute. NSW constabulary did not respond to requests for comment.

When Bar Grazie archetypal leased the Potts Point storefront successful July 2022, the rent was $130,000 a year. Magree purchased it that period for $2.5 million. By the extremity of the year, the rent had accrued by astir 75 per cent.

”It was tally truthful poorly, that edifice could ne'er person afforded $130,000 a twelvemonth successful rent,” said 1 erstwhile employee.

In August, the spot was advertised for merchantability with a 10-year lease for Bar Grazie tally by “renowned hospitality seasoned Barry McDonald” with an yearly rent of $225,000-a-year.

“If your rent is much than 10 per cent of your takings, you can’t spend to survive,” said Martin.

The caller owners, who asked not to beryllium identified, settled connected the spot successful December for $3.39 million.

“The caller owners of the gathering indispensable beryllium spewing if Barry’s present closed down due to the fact that Greg sold it connected the [basis] that Barry would support paying rent,” said 1 erstwhile partner.

Magree said McDonald paid his rent and the spot was advertised astatine marketplace rate. He said helium had invested much than $350,000 successful renovations.

“I’m conscionable the landlord. I’ve had hundreds of these properties. I acceptable retired properties. I adhd worth and I merchantability them,” helium said.

In April, Bar Grazie closed its doors. McDonald said it was due to the fact that “it wasn’t truly arsenic engaged arsenic past year”. “The different crushed is due to the fact that I’ve not been precise well,” helium said.

It was McDonald’s 19th restaurant.

“This is simply a signifier that truly needs to beryllium stopped,” Martin said. “Number 20 volition travel soon.”

With Perry Duffin

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