Restaurant Boss Turns Up In Lamborghini, Refuses To Pay Food Supplier

Big restaurant chain, bigger losses

According to Cedric Ng, owner of a seafood and meat wholesaler that he declines to name on record, it’s the chain restaurants that hurt suppliers most. “There can be five to six outlets [of a restaurant], and each outlet may buy about $5,000 to $7,000 (worth of produce) a month. When they close, that’s like at least $25,000 to $35,000 gone. It’s a lot of money.”

“For the first time, I went to someone’s shop to shout & demand payment”

Yeo Si Rui, pastry chef and co-owner of Chu & Co, a popular bakery in Serangoon Gardens, once supplied bread to a café that failed to pay her when it ran into cash flow problems. The situation dragged on for months before she had to take matters into her own hands. 

“For the first time in my life, I went to someone’s shop to shout and demand payment. We continued to supply him with bread, but our bad, we let him pay every two months. This then snowballed to about five months, and he ended up defaulting (on the payments)”. However, the owner wasn’t there, only his chef. She adds: “I felt bad, lah. Because I know it’s not the chef’s fault. He also told me he’s leaving the cafe and that we weren’t the only people that the café owed money to,” adds Rui.

“Please don’t do this to us, we’re a very small business” 

“[Later], I told the owner: ‘Please don’t do this to us, we are a very small business’. I even told him to just pay us $500 a month if he cannot make the full payment, which amounted to about $4,000. He paid [$500] for one month, then just ignored us. I’ve given up already. This was a lesson learnt,” she sighs.

Why didn’t Rui pursue legal action? “It’s a lengthy process and we will still have to pay legal fees,” she explains. 
 
That debt-evading cafe continues to be open for business today. 

Getting the money back is difficult, sometimes impossible

Once a restaurant stops paying, suppliers have very few options. “So basically, what we will do first is debt catch — engage a (white collar) collector who will send a demand letter for the money owed,” explained Ng. “If the demand letter doesn’t work, then the collection company will send a collector down (to the restaurant). But usually, when the restaurant ignores the demand letter, even sending the collector doesn’t work because that means they can’t pay, and they are going to close.”

Going to the Small Claims Tribunal is an option, but not a very effective one. “By the time the case is heard, the restaurant has already closed or is about to close. “The owner doesn’t even attend court. They can’t be bothered,” said Ng. “They don’t care because they know that once they close shop, they don’t have to pay us.”

“It helps if you can get a judgment in before the company shuts down,” added another supplier of ice cream that asked not to be named. “But if the company’s already shut down, it’s unlikely that (the judgment) will help. I mean, yes, you’ll get the court order in your favour, but the company may not have the assets to pay you anyway. So it really depends on how early you get in,” she shares.

Restaurant owner arrived in Lamborghini and refused payment

To add salt to the wound, it’s not uncommon for restaurateurs to admit outright that they have no intention of paying the outstanding invoices. Ng recounts an incident when his company sent an evictor to a restaurant. “The staff refused to let the evictor in. He used his hand to stop the evictor from coming into the shop, which is illegal. The staff called the restaurant owner, who came down in his Lamborghini and said, ‘Why are you here? I’ve changed companies. This company that owes you money is no longer around.’ Although the police came, there was not much they could do about it. And because the company is closed, I would have to spend more money trying to get my money back, and by this time, I had already spent so much trying to collect our outstanding payment. So I had no choice but to write it off.”

Ex-hotdog shop boss promised to repay $10K, but left the country

Huber said, “The owner of [a now-defunct] hotdog eatery, who owed us $10,000, told me face-to-face that he would pay, even if it meant the money coming out of his own pocket. Then he migrates to Australia and disappears. And [companies] have a lot of excuses. The most common is that their business partner has run away with the money or the landlord raised the rent.”

“Since you keep harassing me for payments, I’m not going to pay you”

“One of our most ridiculous encounters was with the former owner of [a famous high-end] restaurant-nightclub, when he sold the business and told me he would pay me the outstanding amount. When we chased him for the payment, he paid a bit, then one day said, ‘You know, since you keep harassing me for the payments, I’m not gonna pay you.’”

Huber lost up to $70K in unpaid bills

While both Huber and Ng said that this is the worst spate of restaurant closures they’ve seen in their careers, they have learnt over the years to protect their businesses from huge losses.

“We only do cash on delivery for new customers,” said Huber, who’s lost up to $70,000 to bad debts. “Over time, we might offer seven or 14 days (credit term). But customers can be very pushy. At the beginning of the relationship, they push for 14 or 30 days. When they do that, we ask the directors to sign a letter of guarantee. That way, if the restaurant closes with an outstanding payment, we can go after the director for the money owed. Otherwise, we ask for a very nice, long track record.”

Some eateries close & reopen under a different name to escape debts

What’s even more frustrating? Some owners shut down one company and reopen under a new name. While company registration records are public, they may not list the names of those who’d defaulted on payments in the past, as these individuals often go into the new businesses as “silent” partners. “Which is why now, when new companies come to us, we usually say, ‘no credit’. Maximum, I give you one bill. So if we lose money, we only lose one bill,” said Ng.

A downturn on all sides

Naturally, suppliers are not immune to the downturn. More than 3,000 F&B establishments in Singapore have closed in 2024, the highest number in almost 20 years. In turn, suppliers estimate that their revenues have dropped by about 20 per cent this year. As restaurants redesign their menus in the name of minimising costs and offering lower prices, so too are suppliers bracing themselves for a shrinking pie.

Photos: Huber's Butchery, Dillon Tan, Instagram/lamborghinisingaporeofficial

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