Sour taste for burrito chain creditors

NZ Herald

5 Sep, 2014 05:00 PM3 mins to read

Founder Jeff Moss blames the collapse of the fast food chain on a legal battle with his former wife. Photo / Dean Purcell

Founder of failed fast food outlets running similar venture in Hong Kong despite unpaid debts here

The founder of a failed string of Auckland burrito outlets is running a new Mexican fast food chain that will open in Hong Kong this month.

Creditors left out of pocket by the Original California Burrito Company's collapse had expressed frustration that Australian businessman Jeff Moss was continuing in business overseas.

But Moss said he was broke and had been taken on as a consultant to set up and manage the Cali-Mex chain, which will have four outlets across Hong Kong. He said he did not own any shares in Cali-Mex, which was backed by 25 "high net worth" Hong Kong investors.

"I've taken a job," Moss said. "I was totally wiped out by the whole [Original California Burrito] thing and every last dollar that I put into that business went. It's all gone."

Moss opened the first Original California Burrito Company store in Auckland in 2011. The business grew rapidly into a 10-store chain in New Zealand and expanded to Australia and the Netherlands.

But the Aussie stores and all apart from one in this country closed down after bank funding for the business dried up and rents went unpaid. The Manukau Original California Burrito outlet, which was run by a franchisee, is still operating, as is the Netherlands store, Moss said.

Last year Moss blamed the collapse on a legal battle he was having with his former wife, Lisa Krukziener, who was also a shareholder and director of a raft of companies that operated the burrito chain. He claimed the legal issues had caused his bank to withdraw funding.

Since then two companies associated with burrito chain - Barrow and Hudson, which owned the franchise rights, and California Burrito Company - have gone into liquidation and unsecured and secured creditors of the two firms are owed more than $270,000, according to reports from liquidator EY.

Mexi-Foods director Greg Glendining said his company was still owed around $20,000 for food and beverages supplied to the Original California Burrito chain.

Lawyer for the franchise Stewart Germann said he was owed over $30,000. "I'm pretty annoyed about it all," he said.

Moss said he felt "absolutely dreadful" about the money still owed to creditors.

"I lost all my money and I never got a dollar back," he said. "I did everything I could to try and sell the business and any funds that would have come from that [sale] would have gone straight to creditors. Unfortunately everything I did was either stifled by litigation or other things outside of my control."