The company behind two well-known Sunshine Coast restaurants has offered 15 cents in the dollar to settle a debt of almost $1 million with the Australian Tax Office.
Yugo Canteen, which operates Junk at Maroochydore and Sippy Downs, owes the ATO $959,634.87, according to a document filed with Australian Securities and Investments Commission.
The amount represents more than 96 per cent of a total of $997,236.14 owed to creditors.
The Queensland Revenue Office is the next largest creditor, owed $27,042.84, while other 15 creditors are owed three and four-figure sums.
The debt information is in a restricting plan which has been put to creditors who will decide the fate of the company by choosing to accept or reject it.
Under the restructuring plan, Yugo Canteen would pay $165,000 in 24 monthly instalments – or 15.04 cents in the dollar – to wipe its debts.
Yugo Canteen director Scott Hoskins pointed out that the company was restructuring and not in liquidation or administration.
He said the company’s financial problems began during covid and had been exacerbated by a fall in revenue due to the cost of living.
Mr Hoskins said he committed to leasing premises for Junk at Sippy Downs prior to the pandemic.
“When covid came about, that got delayed but we still had made that commitment and our building costs increased by the time we were able to do it,” he said.
“That took three times the time to build and our cost to build the restaurant was about $1m.”
Mr Hoskins said he sought rent relief from Junk’s landlord at Maroochydore during covid and received support conditional on signing a new lease which included a refurbishment as a condition, adding to expenses.
He said the company’s ability to recover from the two major expenditures was hampered by a decline in revenue – 25 per cent down this year on last year.
Faced with the choice of paying the tax office or keeping his business, he chose the business.
“I’ve put everything into these restaurants. These restaurants feed 45 families,” he said.
On the subject of using his house or car to meet his debts, he said, “nobody knows what sort of mortgage or equity I have” but indicated he had already drawn on it to keep the business running.
He said trying to keep the restaurants going had been difficult since covid.
“It’s been a tough four or five years, no question about that. But I’m committed to 45 people and that’s what gets me up in the morning and that’s what gets me on the phone talking to journalists asking me questions about my home,” he said.
Mr Hoskins co-founded Junk in 2014 with chef Tony Kelly, who sold him his share of the business in 2017.
Mr Hoskins said he had accepted a suggestion from his accountant to take advantage of a Small Business Restructuring Program offered by the ATO to assist businesses struggling to recover from covid.
The program is only open to businesses with debts under $1 million, which have paid all employee entitlements and which have up-to-date, or substantially up-to-date, tax lodgements.
Creditors have until November 25 to respond to the payout offer.
Mr Hoskins is hopeful they will accept and Yugo Canteen will continue operations, saying about 98 per cent of restructures through the program are successful.
The ATO said 1261 small business restructuring plans had been accepted by the ATO since the inception of the scheme in 2021. It was unable to provide figures for the total amount of debts paid to it and the total amount written off under the scheme.
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