The Cervantes Tavern is set to go on the market for the second time in less than two years after a venture backed by a star of WA's finance broker scandal turned sour.
Former Global Finance boss John Margaria could be left empty-handed after Cervantes publican Susan Nelson closed the doors of the seaside venue in the lead up to Christmas.
Albany businessman Frank Love has seized control of the property from joint venture company Cervantes Tavern & Restaurant Pty Ltd in a bid to get a return on more than $600,000 in finance deals pulled together by Mr Margaria.
Mr Margaria's private com- pany Alpha Super Pty Ltd is listed on Australian Securities and Investments Commission records as being a 50 per cent shareholder in Cervantes Tavern & Restaurant Pty Ltd. Ms Nelson is shown holding the other half.
Mr Margaria said he had had no part in the day-to-day running of the liquor and food outlet, with that being entrusted to Ms Nelson. "It did not work," he said.
Mr Margaria became one of the faces of the WA financial broking scandal through his role as managing director of Global Finance, which collapsed in 1999 leaving investors facing losses of more than $17 million.
He was described in State Parliament in 2000 as being among the dirty dozen of the finance broking industry.
After his interests settled a $1.7 million legal action with Global liquidators by paying around $130,000, Mr Margaria was bankrupt from 2007 to 2010.
In mid-2012, he organised $600,000 in finance with Mr Love to buy the Cervantes Tavern, on the Indian Ocean coast 200km north of Perth.
The loan was supported by a registered mortgage recording an interest rate of 12 per cent and a 12-month term expiring in May last year. The loan was extended in August and principal increased to $650,000.
Mr Love said he had bankrolled the Cervantes deal after reading an advertisement in _The West Australian _ from Mr Margaria's company Solicitors Finance Pty Ltd. He had been aware that Mr Margaria was part of the syndicate buying the tavern.
The businessman said he had seized the tavern property as mortgagee and would attempt to sell the venture, complete with paid-up liquor license, to recover his loan and unpaid interest. He was not sure whether he would handle the sale himself or appoint an agent.
In 2001, ASIC banned Mr Margaria for life from carrying on any business giving investment advice or dealing in securities.
Mr Margaria said he had no problems arranging the tavern loan deal with Mr Love because he was part of the purchasing syndicate. "You can organise money for yourself - no problem," he said.
Land title records show Cervantes Tavern & Restaurant paid $737,000 for the property, which had been sold at auction by former operators Erica and Ivan Teakle.
The property had been advertised for sale last year for more than $3.6 million, with Ms Nelson as the contact.
She could not be reached on the number provided in the advertisement.
The tavern's phone has been disconnected.