Two Oporto stores in Sydney collapsed in liquidation last week following an Australian Taxation Office (ATO) demand for the repayment of a tax debt.
The director of the two businesses, Ming Zhong, was issued with a payment demand of between $400,000 and $500,000, news.com.au reported.
The liquidator, Henry McKenna of Vincents, told news.com.au Zhong had been issued with a director penalty notice. This requires the payment of the debt within 21 days, or company liquidation.
Zhong is the director of Jevnt Pty Ltd and Pymz Pty Ltd, which operated Oporto Newtown and Darling Harbour restaurants.
Both stores are now closed; the Darling Harbour store has been shuttered for more than a year as it is located within the Harbourside Shopping Centre which shut for refurbishment in January 2023.
Debts accrued during Covid
McKenna told news.com.au much of the debt accrued by Zhong originated during the challenging Covid period. Increased input costs had also contributed, he said.
An Oporto spokesperson told Franchise Executives “We are saddened and disappointed to learn that one of our franchisees has been forced into liquidation, and we are working closely with the owner and staff to minimise the impact.
“Our focus is on reopening Oporto Newtown as soon as possible.”
Late last year industry insights predicted a rise in insolvencies. Research pointed to a ramping up of court action and drawing back debts by the ATO and major banks.
Insolvency practioner Malcolm Howell at Jirsch Sutherland cautioned business owners that legacy debts are in the spotlight now.
“The ATO isn’t just after current debts; there are also clear signs it is ‘dusting off old files’ to recover company debt from directors personally, where they have the power to do so under the Director Penalty Notice (DPN) regime,” he said.
