City of Karratha writes off $400k debt after Korean BBQ plan goes up in smoke

The City of Karratha has been dealt a $400,000 financial blow after Cecel Filipino and Asian Food, the tenant of a prime property at The Quarter HQ, went belly-up. Initially leasing a modest space at Shop 3 for retail and groceries, CFAF had grand plans to spice up the Karratha food scene by expanding its grocery store and bringing a Korean BBQ restaurant to the mix. However, its ambitions were marinated in trouble as the emergence of COVID-19 threw a wrench into the business partnership and left its restaurant fit-out smouldering on the back burner. Despite efforts by the city to work with the tenant, including issuing notices of default and termination of the lease, the tenant failed to comply with the terms outlined in the agreement. The city subsequently terminated the lease and re-entered the premises in February 2023. Efforts were made to recover the arrears, including drawing down on a bank guarantee, but the situation worsened when the tenant declared bankruptcy in November 2023. The total creditors’ debt amounted to $922,465, with the City of Karratha owed $426,000. At the February 12 ordinary council meeting, councillors voted in favour of writing off the debt. “The tenant has had difficulty meeting lease payments and outgoings,” the officer’s conclusion in the OCM agenda said. “The city has exhausted all available options to recover the outstanding debt from the tenant. “As the debt is no longer commercially collectable and the tenant has no significant assets, the debts should be written off.” It leaves Karratha ratepayers $426,000 out of pocket.