BPA creditors pessimistic, assets held under separate companies

Salvatore Algeri and Simon Alexander Wallace Smith from Deloitte were appointed receivers on 19 March. They represent secured creditor NAB.

Because it is a receivership, there are no formal creditors' meetings or reports, so onlookers cannot expect the level of transparency they would get with an administration or liquidation.

Unsecured creditors include all three major paper merchants, Spicers, BJ Ball and KW Doggett. They all told ProPrint that Melbourne-based BPA had been trading within terms and that the insolvency came as a relative surprise.

KW Doggett managing director Simon Doggett said: "KW Doggett Fine Paper is very disappointed with our credit position and outcome at BPA Print Group Pty Ltd.

"We have had a long trading association with this customer and the account was within all its trading terms when we first became aware of some stress in late January," added Doggett.

Andy Preece, executive general manager of Spicers' parent company, Paperlinx, told ProPrint that he had "a low optimism of any chance of recovery".

[Related: Do forensic checks before extending credit]

BPA's asset structure points to an unlikely recovery for unsecured creditors.

Directors Brett Turnley and Graham Burgess are also directors of another company, Colmbine Pty Ltd, which NAB also put into receivership on 19 March.

According to documents filed with ASIC in March 2011, Colmbine owns the 10-colour Heidelberg Speedmaster in operation at BPA, and NAB has a charge over the company of more than $3 million.

Burgess would not comment, and Turnley did not respond to ProPrint's requests for comment.

The receiver, Deloitte's Salvatore Algeri, explained: "One is a trading company, BPA, and has all the employees and customer relationships and creditors. Colmbine has the assets."

Algeri added that BPA's only assets were the business and the goodwill, and that he expected debts would be over a million.

Another company, BTGB Investments Pty Ltd,  was established by Turnley and Burgess in July 2012. According to the Personal Properties Security Register (PPSR), Fuji Xerox Finance registered a security interest at BTGB on 6 November. BPA announced the installation of a Xerox iGen4 on its Twitter account in August.

It could mark yet another bad debt for the paper merchants in what has been a horror start to the year, with the massive exposure to Geon as well as failures of companies such as Vega Press.

Simon Doggett said: "Our company cannot continue to sustain this level of bad debt exposure and will undoubtedly review its unsecured trade credit policy in due course.

"We are continuing to work diligently with all our customers to understand the strength of their balance sheets to support some stress and avoid similar events occurring at our expense.

"Our customers understand the pressures we are under and are largely co-operating with our credit reviews. In fact, customers that have a well managed business and balance sheet are welcoming such a credit review as they understand the industry restructure will work to their advantage," added Doggett.

[LinkedIn: Should the industry stop operating on credit?]

BPA Print Group is in no way connected to Sydney print management company BPA (Business Print Australia).

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