Whangārei Butter Factory staff face thousands in lost wages after liquidation

The Butter Factory in Whangārei closed its doors this year, and when it did, the eleven people who worked there learned about it the same way most bad news travels now—through a group message from the venue manager. Each of them stood to lose thousands of dollars in unpaid wages, annual leave, and holiday pay. For some, like one former employee who spoke anonymously, the figure was at least $5,500. Most of the other staff faced similar shortfalls.

The venue had changed hands in late 2024 when Kaur and Singh took over. Almost immediately, they ran into trouble with the authorities. In the nine months before the new owners arrived, police had recorded 520 incidents in Butter Factory Lane and the nearby Laurie Hall Park—breaches of liquor bans, public urination, vomiting, fighting. When Kaur and Singh applied to renew the on-licence, police opposed it, citing their lack of experience running a high-risk venue. The Ministry of Health, the Whangārei District Council licensing inspector, and four members of the public sided with police.

The owners believed their path to profitability lay in extending trading hours from 1am to 2am. They applied for that extension this year. Again, police, health officials, the council inspector, and members of the public objected. The reasons were familiar: fights breaking out, alcohol being taken off the premises, an intoxicated woman being carried out by friends. The application was refused. Kaur and Singh said the extended hours were their last chance to make the business work.

But the problems ran deeper than licensing. A former worker, speaking on condition of anonymity to the Northern Advocate, described a venue that had lost its footing operationally. An experienced manager had left. The person who replaced them lacked authority to make decisions, while the owners were often unavailable to answer questions. Contractors and casual workers departed because they weren't paid on time, which meant the remaining staff carried an ever-heavier load. When the venue finally closed, staff learned about it through that group message—a final punctuation mark on what had become a fractured relationship between ownership and workers.

Kaur and Singh offered a different account. They said they were doing everything they could to keep the business alive, with Kaur herself working full-time in the kitchen after all the kitchen staff left. Many of the problems that had given the venue its reputation, they argued, had occurred before they took over or happened outside the venue's walls. They acknowledged that staff would be upset about losing their jobs and said they had held weekly management meetings. On the question of unpaid contractors, they denied the allegation but acknowledged they couldn't afford to pay DJs on the night they performed, though payment came a few days later. They were also in a settlement process with a former worker who had taken them to mediation over alleged breaches of employment law, which they attributed to poor communication rather than deliberate wrongdoing.

The liquidator, Pritesh Patel of Patel and Co, has begun the formal work of untangling what happened. The eleven employees are classified as preferential creditors, meaning they stand ahead of most others in line to recover what they're owed. But that ranking may offer little comfort. A company called Revell and Reid Group held a General Security Agreement, which gave it first claim on all stock, plant, and equipment after closure. The initial liquidation report revealed that Punjab to NZ Group, the operating entity, owed Inland Revenue $171,000 in core PAYE and GST, plus another $277,000 in income tax and a small business loan. Other secured creditors—DB Breweries, BOC Gas, Federal Merchants, and Bizcap—were also owed money, though the amounts weren't detailed in the preliminary filing.

Patel's investigation will examine whether the company breached the Companies Act, including whether transactions were made while the business was technically insolvent. Employment law breaches are also on his agenda. The next report is due in February 2027, which means the workers who learned about their job loss through a text message will wait months to learn whether there's anything left to recover.