However, the company directors were able to find a buyer for business assets and the shop is now trading.
Dunedin Donuts Ltd ran Donut King in the mall from June 2019.
The departure of a prominent retailer from the mall and Covid-19 lockdowns resulted in a major loss of income, liquidators from Laing Insolvency Specialists said in an initial report to creditors and shareholders this week.
The directors attempted to sell the business and a buyer was eventually found, but sale funds were insufficient to pay all company creditors, the liquidators said.
The Donut King franchise has continued at the Meridian Mall, under new shop ownership.
Reasons given for the liquidation of Dunedin Donuts were effects of Covid-19, lack of rental relief from the landlord and the departure of a major retailer from the mall affecting foot traffic and therefore turnover.
Donut King was near Kmart, which did not reopen in the mall after the Covid-19 lockdown that started in March 2020.
Kmart announced in July that year it was not going to renew its lease and cited concerns about seismic strengthening needed at the mall.
Lendlease Funds Management Ltd owned the mall at the time and has since sold it to an Auckland private investment company.
Kmart was replaced in the mall by furniture and electronics retailer Smiths City in September 2020, now known as Smiths.
Kmart last week announced a planned return to Dunedin, at Andersons Bay Rd.
Dunedin Donuts has Inland Revenue Department liabilities, the liquidators have been told.
They were aware of two unsecured creditors.
"Indications at present are that due to the limited assets available, it is not expected that a dividend will become available to creditors," the liquidators said.
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