Steve Kilgallon investigates the curious tale of Burgered, the Auckland-based food empire with big dreams that came crashing down.
This article was first published on Stuff.
From anonymous buildings in Auckland’s Grey Lynn and Remuera, eight different brands offered a smorgasbord of Uber Eats choices. Zucchero served Italian pastries, Spiced! offered Indian cuisine, GPK sold pizzas and Burgered sold, well, burgers.
There were substantial expansion plans under the guidance of two celebrated chefs.
Tapping the ‘ghost kitchen’ trend for delivery-only restaurants seemed a smart business move from ultimate owner Delta Private Equity, part of their huge network of companies which claimed operations in land development, infrastructure, medical technology, renewables and media.
Delta took “calculated risks”, would consider investments in the $5m to $25m range and was chaired by a celebrated businessman, Grahame Craig, founder of Woolrest and Business Mentors NZ.
But yet last year, this new food empire crumbled, leaving a trail of unpaid bills, rent and in particular staff – who blame the two men who appear to be at the heart of the business, one a struck-off, jailed lawyer, and the other a convicted fraudster: Murray Athol Osmond, and Matthew John Young.
Too good to be true?
When hospitality manager Tyrone O’Kieffe signed on to work for Burgered, the appeal was the money: the pay rates were way better than industry standard.
Now, he reflects: “They were selling something that was too good to be true.”
Other staff say the same: Burgered paid better. One got a new iPhone on her one-year work anniversary. Company job advertisements boasted of paying the living wage, offering full-time salaries instead of hourly pay, and even complimentary podiatry.
Staff wondered how they were so handsomely rewarded, because most say business did not boom for the network of hospo companies, including Burgered, which traded under the umbrella brand of NZ F&B. It’s complicated, so we’ve included a chart to explain the network, with the sole director of each company also listed.
“The place was never busy,” says Taiko*, a chef at Grind Cafe, a daytime operation tagged on to the Grey Lynn ghost kitchen. “It was so weird. They pay you so good to do nothing.”
Another Grind chef saw the nightshift takings – $3,000 on a good night – added on the $600-800 the cafe took, and wondered how it sustained a staff of 10 and a layer of management suited to a much larger company.
One chef says that while the staff were mainly young female Asian immigrants, the managers were white middle-aged men who drove leased Mercedes-Benzes and BMWs.
They included two head chefs with excellent resumes: Adrian Managh, who ran operations, had been head chef of gourmet pizza chain GPK, and owner-operator of Remuera restaurant Banque and was described on NZ F&B’s now-deleted website as having an “amazing palate, flawless skills and incredible eye for detail”.
Stuart Young, in charge of menus, worked for the Roux brothers in London and at the luxury Huka Lodge, and the same website promised he would “curate and deliver jaw-dropping experiences”.
It launched in late 2020; an early hire says “it was amazing at first … all the best stuff”.
And once the Grey Lynn kitchen (and cafe) and Remuera kitchen were operating, there were ambitious plans for a standalone Zucchero pastry shop in Remuera, a Parnell restaurant, and three separate tenancies in a new CBD development, Snickel Lane. None of those happened.
Instead, after the August 2021 lockdown, the wheels began to fall off.
First, the Snickel Lane plans – a vodka bar called Boris, another restaurant called GPK, and a takeaway called Fish, Fish and Chip – faltered.
A chef hired for GPK was instead assigned to the ghost kitchen, and says she pressed management as to when it would open: “‘Hey, what’s going on? When are we going to open this restaurant we’ve been talking about?’… a month passed, two months passed.”
The landlord re-possessed the Snickel Lane properties; agent Micky Sutinovski said he was “very happy” the company was no longer his tenant but wasn’t chasing the debt.
“It is basically pin a tail on a donkey, it’s just pointless. They’ve been very difficult to deal with. I’m really wary now.”
Stuff interviewed eight former staff who were all owed wages. Through the final months of 2021, they say payday slowly slipped from Wednesday to the following Monday, and there were minor pay discrepancies.
In November, some reported receiving only half-pay. Over the Christmas holiday fortnight, say multiple staff, there was no pay. “And that’s when the excuses started to roll out,” says O’Kieffe.
Management said the issues were caused by a change in accounting software, delayed Covid recovery grants, and an unspecified illness which prevented the company’s director, Craig, from signing off payments.
Some staff say they received assurance that US investors were about to inject funds into the company. “I was patient: and I believed them,” says one.
By early 2022, say multiple staff, they were experiencing supplier trouble: the coffee machine was repossessed, suppliers cut them off, so ingredients were bought daily; a generator was used for power.
Wages were at times paid in cash, or from different bank accounts, including the personal account of company director Murray Osmond, and staff saw different company names on their payslips, had missing payslips and incorrect hours.
Stuff has seen multiple message threads where staff pleaded with management for pay, and were fobbed off. Several told Stuff of how they faced depression, stress, and struggled to pay bills.
One staffer recorded a meeting with Managh and the HR boss, Gareth Needham, in which Needham said they were awaiting a “Covid relief package” from MSD and IRD and “there is a multitude of reasons for the other issues we have been experiencing” before admitting he’s “having trouble” getting information from those above him.
Yet they kept hiring. Roberto*, an experienced chef, began work in March. He was paid properly for the first fortnight, but says on his next payday, Needham and Managh told staff they could only offer half-pay, in cash.
He declined, but others accepted a similar offer.
Staff say Needham then said they would be paid what they were owed on April 1, when the company would receive a government subsidy. “And on April 1, they didn’t pay us. They broke their promise to us,” says Roberto, who resigned.
In late April, a new company, Grind Cafe Grey Lynn Ltd, was incorporated (ultimate owner, Delta Private Equityagain) – and offered contracts to at least two staff which included incentives of transferred holiday pay, but also a clause saying “You agree F&B Group and Delta Private Equity Limited are not a party to this offer”.
“They told me ‘if you don’t sign this, you’re not going to see any money from us’, they really pushed me to sign it,” says one chef. She declined, believing she would never receive that money anyway.
Both Managh, the head chef, and Needham, the HR boss, say the new contracts were in the “best interests’’ of staff.
They say they had voiced their concerns about staff not being paid, but believed the reasons they were told.
Needham says he hopes staff “get every cent of what they are owed; every cent” and that he’d worked as hard as anyone during an “exceptionally difficult time for the food industry”.
Managh said he was upset staff were unpaid, but was also owed money. He said the business had good equipment, start-up capital, and, unusually, had paid staff in full during lockdowns, until times became tough.
While staff mostly dealt with Managh and Needham, the man most thought was in charge was Matt Young, who described himself on company documents as Delta Private Equity’s “Head Guru – People, Culture & Brand”.
That’s right, says one staffer, “he was the guru of food”. Another recalls: “Matt said ‘I am not your boss, I’m nothing’; he freaked out at being called the boss”.
That could be because Matt Young is a three-time bankrupt and remains so, and thus by law is prevented from being a company director or manager. Young was jailed in November 2017 for four years, 11 months on 13 dishonesty charges relating to about $269,000.
“He didn’t get me, but he might have got other people,” says one former staff member, owed $43,000. “He’s a real big talker. He once said we should all go to Queenstown for a holiday.”
Another found a report of Young’s previous conviction and couldn’t believe it was him. The company, however, had told senior staff it had a “second chance” policy, and also employed another man who’d been recently released from prison for possessing child sexual abuse imagery.
Young said he was open about his past and his role was to act as HR adviser, create and define the brands, assist with marketing and work on the food, but he “certainly never described himself” as a manager.
He said he “truly hopes” staff are repaid, but defended the company’s record of offering living wages, flexible working conditions and proper hourly rates and “offering people second chances if they were upfront about their criminal past”.
Both Managh and Needham praised Young, with Managh saying he was “compassionate and gave a damn about the people”.
Young’s name is indeed absent from any of the companies which lead to Delta Private Equity. Instead, the name which occurs most frequently is that of Murray Athol Osmond.
Young and Osmond have been friends and business associates for nearly 30 years.
Osmond, a lawyer, was struck off for taking money from his law firm trust account, and then later jailed for 33 months for conspiracy to defraud. On an internal phone directory, Osmond was described as Delta’s head of mergers and acquisitions.
When Stuff approached Osmond at his Cambridge home he slammed the door without answering questions but later responded to written enquiries.
He says he has no ownership stake in Burgered or any other Delta company, but stepped in to help at Burgered at Grahame Craig’s request in December 2021.
With hindsight, he says, perhaps he shouldn’t have, but he believed the government would continue to support the hospitality industry.
He said Burgered had begun with a strong capital base and good staff but like other businesses, had been devastated by Covid and closure was “a decision made after careful analysis”. He blamed late Covid payments and offers of support which “sadly did not eventuate”.
While staff dealt regularly with Young and some had met Osmond, none ever encountered the apparent big boss, Grahame Craig.
Craig remains listed as director of at least seven Delta Private Equity companies, although Delta’s website describes him as “chairman emeritus” and explains he has retired for health reasons.
Craig’s family told Stuff he had been incapable of involvement in business affairs since at least Christmas 2021.
Grahame Craig now resides in a South Island care facility and his son holds an enduring power of attorney on his behalf. Not until December did they learn of the issues facing the companies linked to his name.
The issue of Craig’s involvement is now before the courts. The fancy cars must have gone by June, for that’s when another Delta company, Delta Shared Services, was placed into liquidation by car leasing business Premium Mobility.
Liquidator Simon Dalton’s first report indicated debts of around $100,000. Craig was Delta Shared Services’ director, but Dalton had been unable to contact him, was aware he was in care, and believed Osmond was in true control.
He said Osmond had not co-operated, and so he had applied under section 261 of the Companies Act to force him to provide information.
Osmond said he was contesting that and Dalton’s assertion was “not supported by the facts”.
The private equity backers
So what of the mysterious, cashed-up private equity company behind it all?
Burgered was part of a sprawling network of about 40 companies, the majority of which had some association to Murray Osmond.
All were ultimately owned by Delta Private Equity, which in turn is owned by another company, Deltrust, which lists Osmond as its sole shareholder, although Osmond says he’s a nominee director for Delta’s private investors.
That’s not unusual in private equity: the model is to set up a series of arms-length companies, discrete from each other, so those that fail don’t take down the rest. And it’s not unusual to hide the investors’ identities behind a nominee.
But of those 40 companies, when Stuff checked, seven were overdue to file their annual returns, three had been removed, and at least seven still listed the incapacitated Grahame Craig as sole director.
Delta once enjoyed offices on the 18th floor of a Queen Street office tower but vacated after Covid struck – one former employee who visited in a vain attempt to serve legal papers saw it abandoned, with piles of undelivered mail. Their registered address is now Osmond’s modest Cambridge bungalow.
When Stuff made enquiries, Delta Private Equity’s website had an edit to remove the biographies of Murray Osmond and Rachael Hayton from its “investment committee”. The website now lists only emeritus chairman Craig, and acting chairman Zachary Star.
Stuart Gloyn, Hayton’s lawyer, said Delta removed her name after he threatened an injunction; he said he had made at least five previous requests for its removal.
Hayton, a freelance CFO, said her only involvement with Delta was advising on a potential fish-farming investment some years ago, and said while Delta kept her informed, none of those projects – including a potential approach for the Burger King chain – eventuated.
She’d originally agreed for her name to be used, but “I did ask for them to take it off over a year ago when I was getting calls from creditors I had no clue about.”
Delta was briefly in the news a few years ago when it emerged as a potential bidder for both Stuff, which was subsequently sold by Australia’s Channel Nine to current owner Sinead Boucher, and the Bauer magazines business. Neither deal eventuated.
Delta’s sole director, Zachary Star, describes himself as “caretaker” chairman. He declined an interview, but in written answers, said it would be “improper” to discuss why Osmond and Hayton were taken off the website.
He said Delta Private Equity was privately owned, so made no public disclosures, and did not discuss its shareholdings but said its structure was not uncommon and was in “accordance with best business practice”.
He said due to Covid, Craig’s ill health and “restructuring”, several Delta entities have been “paused or delayed”, again, “not uncommon in the current environment”.
Star said Delta, like many businesses, had made a “turn away from bricks and mortar” and was always “small and boutique” and would probably remain without an office.
He said he was grateful Osmond provided an address for service, but this was not unusual and standard business practice.
Delta’s own website says its subsidiaries “have the support of their parent yet the independence to grow in their own way”.
But crucially, Star said Delta was not responsible for the debts of companies in which it held shares, as each were limited liability companies and “to assert directly or indirectly that DPE is in any way indebted or in breach of its obligations would be incorrect, untrue and misleading”.
A diminishing empire
The landlord of the Grey Lynn operation evicted Burgered Restaurants Auckland Ltd sometime around May 2021.
An address in Mount Eden listed as the home of some of the Delta companies is derelict, with only some industrial ovens visible through the window, and bills shoved under the door.
The Snickel Lane premises had an eviction notice taped to the windows of the furnished but never-opened Fish, Fish and Chip Co.
Only one outpost of the Delta hospo network remains: Grind Cafe has been re-born on Auckland’s Vulcan Lane.
Managh, at least, is working there, saying: “I need to work to survive and am doing so. The operation of Vulcan Lane is no longer associated with my former employer.” (Matt Young says he has consulted pro bono.)
Several former staff have made fruitless visits there to confront the pair.
Burgered (now re-named BRAK Burns) was due to be struck off the Companies Register in November for not filing an annual return. But both the Labour Inspectorate and two advocates acting for former staff opposed the action, so legal cases could continue.
Unlike most other Delta-related companies, Burgered had three minor shareholders. One of them, David Holland, said he had no knowledge of those actions.
“We have been kept totally out of the loop as to the financials, although we understand what it may be. As far as we are concerned, we are innocent parties here, and I would suggest the other two independent shareholders know absolutely nothing about what has been going on either.”
He said the money owed to him personally was “far more than the restaurant”.
At least 15 former staff have lodged Employment Relations Authority cases, and several have gone to mediation – where they’ve faced Matt Young, representing the companies via another Osmond-directed company, Employment Associates.
Young has agreed to several settlements. None have been paid. One advocate emailed him in early December and received an out-of-office saying he would respond in mid-February.
Both Young and Osmond said they couldn’t discuss those debts. Osmond said it was “simply terrible” staff had gone unpaid but claims staff could still be paid out: he’s taking legal action against the Grey Lynn landlords, who unsuccessfully applied to liquidate Burgered in July. He says damages would more than cover the company’s debts.
Chloe Ann-King, of the Raise the Bar hospitality workers’ union, has worked with several of the aggrieved staff. She said: “In all the years I’ve been doing this union work and dealing with some pretty bad hospo employers, these were the most combative to deal with.”
She described Matthew Young as “hostile and threatening” in her dealings with him. “It was always going to end up here – in massive wage theft,” she said.
“Getting any money back for these workers will be difficult, but they also want to highlight employers like Matt and make sure he never does it again. He is the worst of the worst, and wage theft in our industry is across the board and systemic.”
The Labour Inspectorate is also investigating. It’s understood it has complaints from at least 10 former staff from the Grey Lynn and Remuera operations (run under another Delta-owned hospitality company called F&B Remuera Ltd).
Stu Lumsden, head of compliance and enforcement at the Labour Inspectorate, said its investigation was focused on “potential breaches of minimum wage and holiday entitlements”.
“We are looking at these two companies [BRAK Burns and F&B Remuera] and the directors and key persons of which we understand to be Murray Osmond and Matthew Young. We are also consulting other agencies in relation to this case.”
The Inspectorate, however, is limited to only claiming back wages to the level of minimum wage, and most staff were paid substantially more.
Young said it would be “irresponsible” to discuss that investigation.
The Companies Office said it was “reviewing information” relating to Young, Osmond and Craig and their “numerous companies”.
Reflecting now, Tyrone O’Kieffe, the restaurant manager, owed about $15,000, says: “I don’t think they set out initially to rip us off. They just don’t know how to run a business.”
Roberto, the chef, adds: “Someone has to pay for what they have done to us. Someone is responsible for this.”
*Some names changed to protect identities.