Shopfit Co, directed by partner of reality star Skye Wheatley, strikes deal to pay fraction of tax debt

A $10 million-a-year company run by the partner of a reality TV star wants to strike a deal for its six-figure debt. Read why the company’s administrator has urged creditors to reject it

A $10 million-a-year shop-fitting company run by the partner of a Gold Coast reality TV star wants to strike a deal to pay a fifth of the $938,000 debt it owes to creditors including the Australian Taxation Office.

But the administrator of Shopfit Co, which entered the Small Business Restructuring program in August, recommended creditors reject the deal amid concerns over the accuracy of financial records, uncertainty over related party loans and a new company which appeared to have taken over operations.

Shopfit employs 15 people and is directed by Lachlan Waugh, partner of Big Brother and I’m a Celebrity star Skye Wheatley.

Companies using the restructuring program must have debts below $1 million - which they reasonably believe they are unable to pay. They are then formally classified by ASIC as being in external administration.

Mr Waugh said the concerns over his financial records were about “accounting entries” that were being resolved by Shopfit’s external accountant.

Skye Wheatley with husband Lachlan Waugh.

Documents lodged by restructuring practitioner David Stimpson said related parties including Mr Waugh had borrowed $357,472 from the company – funds which could be pursued in the event of a liquidation.

The report referenced a property at Tallai, where the couple has been documenting an extensive renovation of a dilapidated acreage mansion on social media.

Videos and photos posted by the pair show workers in Shopfit Co shirts working on the property after arriving in a Shopfit truck.

“The director and his partner purchased the property in 2019 for $975,000, it is unclear how much equity is in the property,” the report said.

The company has proposed creditors accept 22 cents for every dollar owed – saying it would pay $227,166 of the $938,702 owed in instalments over six months.

Mr Stimpson’s report said while the company’s records suggested it had $152,680 cash at bank, there was only $33,489 in its bank account.

“Based on this, I believe the plan offer should increase by $100,000,” his report said.

“I recommend creditors reject the Restructuring Proposal Plan proposed by the director … unless it is substantially increased.”

The administrator’s report claimed he had not been provided with accurate records of the company’s finances.

It said there were no records of the company’s current or one-month receivables, when a company with $10 million a year turnover “should have at least $500,000 in work in progress and receivables at any one point in time”.

He said Mr Waugh’s revelation the company had $5.16 million in works under contract reinforced his belief he had not been given accurate records.

Workers in Shopfit uniforms working on a mansion renovation at Tallai.

Mr Stimpson’s report said Shopfit was now trading through another company, which had not paid for the business.

He said “if the business has been transferred to another entity for no consideration, such transfer may be deemed by a liquidator to be a creditor defeating disposition”, which could be pursued further.

Mr Stimpson’s report said the company held as much as $400,000 of equity in its plant and equipment which could also be realised for creditors in the event of a liquidation.

Lachlan Waugh and Skye Wheatley at their mansion reno.

Lachlan Waugh and Skye Wheatley.

Mr Waugh said the company had directed Mr Stimpson’s concerns to its external accountant, Naked Accounting.

“We have been advised that they are just accounting entries and are being resolved,” he said.

Mr Waugh said some negoiation was “normal” when it came to the amount to be paid under a restructuring plan. He said the company was “being advised to co-operate” with Mr Stimpson “as best we can”.

Mr Waugh said the loans mentioned in the report had been made “over several years, relate to several members of the management team, and comprise a small component of wages”.

“Over the time periods concerned, these work out to be immaterial figures that do not impact the company’s performance,” he said.

He said Shopfit would seek to continue to trade as normal if the ATO did not accept its restructuring proposal.

Shopfit has completed fit-outs for scores of high-profile shops including Pink Monkey Burleigh, Red Rooster, Quiksilver, Muffin Break, California Tacos, Sass & Bide and more

The restructure of the business follows similar action by multiple Gold Coast companies as the ATO cracks down on unpaid tax following a pandemic-induced hiatus on enforcement.

Originally published as Shopfit Co, directed by partner of reality star Skye Wheatley, strikes deal to pay fraction of tax debt