Background
Challenges
- A combination of factors including bushfires, floods and the pandemic significantly impacted local businesses’ desire to spend on periodical publication advertising.
- The commission-based workforce was eroded, with JobSeeker being increased to $750/wk.
- Accountant and financial adviser to the business for 40 years fell ill and the company was slow in responding to this compliance gap.
Reasons for hope
- Appointed new advisers.
- Succession within the business from father to son.
- Public health orders lifted and more funds available for local
businesses to return to their prior advertising spend.
Debt Profile
The company had debts amounting to $ 488,855. A majority of the debt owed to the ATO.
SBR Process & Proposal
The business owners engaged us to help with their situation. With our guidance and support through the SBR process, a compromise plan was proposed:
- $150,000 payable within 7 days of acceptance.
- This plan was accepted by the creditors.
Outcome for Clients
Overall the plan was a success for clients who saved thousands off their ATO bill and creditors were able to obtain a return instead of nothing all.
Return for creditors
- 29.15 cents in the dollar (SBR) versus nil if liquidation had been chosen
Company savings
- This business saved $338K off their tax bill
- Company was able to slash 71% off their debts
