Supreme Court battle after popular Darby Street restaurant sold for $2

The Advertiser

7 days ago

THE operator of a well-known Newcastle Thai restaurant breached her duties as a director when she sold Benjamas Thai to a company she owned for $2, the NSW Supreme Court has found.
Ratcharin Sopharak was the sole director of Sorak Thai Pty Ltd, which operated the popular Darby Street restaurant. Ms Sopharak had been running the restaurant since 2019 after coming to an arrangement with the owner, Xuming Du.
But after the pair had fallen out, the court heard that Ms Sopharak set up a new company known as Sorak & Co and sold the restaurant business to it for $2.
This included $1 for equipment and $1 for goodwill.
The court heard Ms Sopharak signed a document titled 'minutes of a director meeting' on July 4, 2022. As the sole director of Sorak Thai, she voted to sell the restaurant business under a contract to her company, including transferring the lease of the Darby Street premises.
At the time of the sale, Sorak Thai had $33,834 in cash and equipment valued at $10,174. This was all transferred to the new company, but Sorak Thai's tax debt of almost $100,000 was not included in the sale agreement and was left in the company.
Justice Mark Richmond found this week that Ms Sopharak breached her duties as a director in the $2 sale.
He said the sale took place "behind Mr Du's back" and left him with the burden of the company's tax debt without the restaurant business to pay it off.
"The explanation for the sale transaction was that she believed if she ran the restaurant without Mr Du's involvement, she could make it profitable," Justice Richmond said.
"However, the evidence establishes that he had little or no involvement in the running of the business."
Justice Richmond did not accept Ms Sopharak's defence that she acted honestly in the sale.
"She made no attempt to establish whether the business was worth more than $2, and it seems highly likely that it was given that the transfer occurred without the burden of the liabilities of the business, which were left behind with the company," he said.
"I infer that she knew that she was likely to benefit personally from the sale, as the sole director and shareholder of the second defendant."
Before making a judgement in the case, Justice Richmond ordered both sides to provide a potential agreement within 14 days.
"The sale transaction was not in the best interests of the company because it was not an arm's length transaction for value and the company was left without any assets from which to meet its significant liabilities to the ATO," he said.
THE operator of a well-known Newcastle Thai restaurant breached her duties as a director when she sold Benjamas Thai to a company she owned for $2, the NSW Supreme Court has found.
Ratcharin Sopharak was the sole director of Sorak Thai Pty Ltd, which operated the popular Darby Street restaurant. Ms Sopharak had been running the restaurant since 2019 after coming to an arrangement with the owner, Xuming Du.
But after the pair had fallen out, the court heard that Ms Sopharak set up a new company known as Sorak & Co and sold the restaurant business to it for $2.
This included $1 for equipment and $1 for goodwill.
The court heard Ms Sopharak signed a document titled 'minutes of a director meeting' on July 4, 2022. As the sole director of Sorak Thai, she voted to sell the restaurant business under a contract to her company, including transferring the lease of the Darby Street premises.
At the time of the sale, Sorak Thai had $33,834 in cash and equipment valued at $10,174. This was all transferred to the new company, but Sorak Thai's tax debt of almost $100,000 was not included in the sale agreement and was left in the company.
Justice Mark Richmond found this week that Ms Sopharak breached her duties as a director in the $2 sale.
He said the sale took place "behind Mr Du's back" and left him with the burden of the company's tax debt without the restaurant business to pay it off.
"The explanation for the sale transaction was that she believed if she ran the restaurant without Mr Du's involvement, she could make it profitable," Justice Richmond said.
"However, the evidence establishes that he had little or no involvement in the running of the business."
Justice Richmond did not accept Ms Sopharak's defence that she acted honestly in the sale.
"She made no attempt to establish whether the business was worth more than $2, and it seems highly likely that it was given that the transfer occurred without the burden of the liabilities of the business, which were left behind with the company," he said.
"I infer that she knew that she was likely to benefit personally from the sale, as the sole director and shareholder of the second defendant."
Before making a judgement in the case, Justice Richmond ordered both sides to provide a potential agreement within 14 days.
"The sale transaction was not in the best interests of the company because it was not an arm's length transaction for value and the company was left without any assets from which to meet its significant liabilities to the ATO," he said.
THE operator of a well-known Newcastle Thai restaurant breached her duties as a director when she sold Benjamas Thai to a company she owned for $2, the NSW Supreme Court has found.
Ratcharin Sopharak was the sole director of Sorak Thai Pty Ltd, which operated the popular Darby Street restaurant. Ms Sopharak had been running the restaurant since 2019 after coming to an arrangement with the owner, Xuming Du.
But after the pair had fallen out, the court heard that Ms Sopharak set up a new company known as Sorak & Co and sold the restaurant business to it for $2.
This included $1 for equipment and $1 for goodwill.
The court heard Ms Sopharak signed a document titled 'minutes of a director meeting' on July 4, 2022. As the sole director of Sorak Thai, she voted to sell the restaurant business under a contract to her company, including transferring the lease of the Darby Street premises.
At the time of the sale, Sorak Thai had $33,834 in cash and equipment valued at $10,174. This was all transferred to the new company, but Sorak Thai's tax debt of almost $100,000 was not included in the sale agreement and was left in the company.
Justice Mark Richmond found this week that Ms Sopharak breached her duties as a director in the $2 sale.
He said the sale took place "behind Mr Du's back" and left him with the burden of the company's tax debt without the restaurant business to pay it off.
"The explanation for the sale transaction was that she believed if she ran the restaurant without Mr Du's involvement, she could make it profitable," Justice Richmond said.
"However, the evidence establishes that he had little or no involvement in the running of the business."
Justice Richmond did not accept Ms Sopharak's defence that she acted honestly in the sale.
"She made no attempt to establish whether the business was worth more than $2, and it seems highly likely that it was given that the transfer occurred without the burden of the liabilities of the business, which were left behind with the company," he said.
"I infer that she knew that she was likely to benefit personally from the sale, as the sole director and shareholder of the second defendant."
Before making a judgement in the case, Justice Richmond ordered both sides to provide a potential agreement within 14 days.
"The sale transaction was not in the best interests of the company because it was not an arm's length transaction for value and the company was left without any assets from which to meet its significant liabilities to the ATO," he said.
THE operator of a well-known Newcastle Thai restaurant breached her duties as a director when she sold Benjamas Thai to a company she owned for $2, the NSW Supreme Court has found.
Ratcharin Sopharak was the sole director of Sorak Thai Pty Ltd, which operated the popular Darby Street restaurant. Ms Sopharak had been running the restaurant since 2019 after coming to an arrangement with the owner, Xuming Du.
But after the pair had fallen out, the court heard that Ms Sopharak set up a new company known as Sorak & Co and sold the restaurant business to it for $2.
This included $1 for equipment and $1 for goodwill.
The court heard Ms Sopharak signed a document titled 'minutes of a director meeting' on July 4, 2022. As the sole director of Sorak Thai, she voted to sell the restaurant business under a contract to her company, including transferring the lease of the Darby Street premises.
At the time of the sale, Sorak Thai had $33,834 in cash and equipment valued at $10,174. This was all transferred to the new company, but Sorak Thai's tax debt of almost $100,000 was not included in the sale agreement and was left in the company.
Justice Mark Richmond found this week that Ms Sopharak breached her duties as a director in the $2 sale.
He said the sale took place "behind Mr Du's back" and left him with the burden of the company's tax debt without the restaurant business to pay it off.
"The explanation for the sale transaction was that she believed if she ran the restaurant without Mr Du's involvement, she could make it profitable," Justice Richmond said.
"However, the evidence establishes that he had little or no involvement in the running of the business."
Justice Richmond did not accept Ms Sopharak's defence that she acted honestly in the sale.
"She made no attempt to establish whether the business was worth more than $2, and it seems highly likely that it was given that the transfer occurred without the burden of the liabilities of the business, which were left behind with the company," he said.
"I infer that she knew that she was likely to benefit personally from the sale, as the sole director and shareholder of the second defendant."
Before making a judgement in the case, Justice Richmond ordered both sides to provide a potential agreement within 14 days.
"The sale transaction was not in the best interests of the company because it was not an arm's length transaction for value and the company was left without any assets from which to meet its significant liabilities to the ATO," he said.