In late 2024, police opposed the on-licence renewal because Kaur and Singh had no experience running a high-risk venue.
In the nine months before they took over, there were 520 recorded incidents in Butter Factory Lane and nearby Laurie Hall Park, including breaches of the liquor ban, urination, vomiting and fighting.
Kaur and Singh applied this year to extend the liquor licence from 1am to 2am, but police, the Ministry of Health, Whangārei District Council licensing inspector and four members of the public again opposed it.
Fights, alcohol leaving the premises and an intoxicated woman being carried out by friends were cited among the reasons for refusing later closing hours.
Kaur and Singh said extending opening hours to 2am was the business’ last chance to make a profit.
Whangārei venue The Butter Factory is closed while its owners are in liquidation. Workers say they stand to lose thousands of dollars each. Photo / Karina Cooper
But a former worker said while reduced opening hours affected the business, she thought the new owners could have turned it around if they were more hands-on.
The worker, who spoke to the Northern Advocate on condition of anonymity, claimed that after an experienced manager left, a new venue manager was not empowered to make decisions but the owners were not available to answer questions.
Contractors and casual workers left because they were not paid on time, putting more work on remaining staff, she said.
When the venue closed, staff were told they would be out of a job through a group message posted by the venue manager – a final example of the soured relationship between the owners and staff, she said.
The worker said she was owed $5500 in annual leave, holiday pay and her notice period, with most of the other 10 staff facing similar losses.
Kaur and Singh said they were doing all they could to make the business profitable, with Kaur stepping in to work fulltime in the kitchen when all the kitchen staff left.
Whangārei venue The Butter Factory got a bad reputation for incidents outside its venue, near Laurie Hall Park. Photo / Denise Piper
The owners were disappointed their application for an extension of hours was not granted this year, given they had gained experience in running the venue.
Many problems that gave the venue a bad name happened before the pair took over or were outside the venue, they said.
Late-night trading was crucial for profitability, given how many CBD businesses were struggling during the day, they said.
The owners said they had a good relationship with staff, including weekly management meetings, but acknowledged many would be upset because they had lost their jobs.
Workers were told about the closure through a message because most were already aware the business was in trouble, they said.
The owners denied contractors were unpaid but said they could not afford to pay DJs on the night they performed, with payment coming a few days later.
The Butter Factory is closed but a message on a chalkboard outside seems to promise a new venue coming soon. Photo / Karina Cooper
Kaur and Singh said they were in a settlement process with a former worker, who took them to mediation alleging breaches of the Employment Relations, Minimum Wages and Holidays Acts.
The owners said this arose from a lack of communication, not deliberate breaches.
Liquidator to investigate business
Liquidator Pritesh Patel of Patel and Co said the 11 employees were among Punjab to NZ Group’s preferential creditors.
However, creditor Revell and Reid Group had a valid General Security Agreement, which meant it got all stock, plant and equipment after closure, he said.
Patel said it was his job to investigate breaches of the Companies Act 1993, including whether transactions were made while the company was insolvent.
This included breaches of employment laws, Patel said.
His initial report showed Punjab to NZ Group owed Inland Revenue $171,000 in core PAYE and GST, plus $277,000 in income tax and a small business loan.
Other secured creditors included DB Breweries, BOC Gas, Federal Merchants and Bizcap, all owed amounts not identified in the initial report.
The liquidator’s next report was due in February 2027.
Denise Piper is a news reporter for the Northern Advocate, focusing on health and business. She has more than 20 years in journalism and is passionate about covering stories that make a difference.