CMYKhub wins Media Options battle

CMYKhub has finally won the right to buy the Media Options business, after a year-long battle marked by drama and protracted negotiations with liquidators.

Creditors for Bhaskar Datta’s failed Sydney trade printer voted overwhelming at the August 28 meeting to reject a rival bid from Sureprint, a company owned by Datta’s sister-in-law Amrit Chandra, effectively confirming CMYKhub’s February sale agreement.

Liquidators at Veritas Advisory tell ProPrint the motion to accept the $213,500 Sureprint bid was defeated on the voices with seven of eight represented creditors voting against it.

Creditors include Heidelberg Print Finance, owed $1.6m; the ATO, owed $762,000; Fuji Xerox which is owed $134,000 and Spicers Paper at $100,000. It is not known which were represented at the meeting.

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Liquidators say the next step is obtaining a court order to force Sureprint and Datta’s other related entity Sydney Print Hub, which operates out of the same Bankstown site and has his son as sole director, to relinquish Media Options assets and intellectual property and stop trading with former clients – which they have been using under a controversial $1000-a-month licencing deal since last September.

A court date is not yet set and there is no word as to whether Sureprint and related entitles will, now being defeated, voluntarily surrender to the liquidator’s demands.

CMYKhub chief executive Clive Denholm says he has not yet been formally notified by Veritas of the meeting result.

“This is the third time our offer has been approved by the creditors or creditors committee. All previous attempts to buy the business have been delayed by the liquidator,” he says.

“We hope that after the latest creditors meeting the liquidator now takes action to recover assets including the equipment and IP transferred to related entities.”

The rejected Sureprint offer was a cash payment of $213,500 in 24 interest-free monthly instalments, meaning Sureprint would have paid only $8895 a month.

This compares to the CMYKhub offering of $180,000 (including $50,000 already paid six months ago) up front, plus 20 per cent of orders placed by former Media Options clients in the first six months after the sale, capped at $180,000, for a total of $360,000.

Denholm says Sureprint would also have to pay the $70,000 it owes Media Options – making the offer worth $250,000 up front and a grand total of $430,000.

[Related: See you in court!]

When presenting the competing offers to creditors, liquidators David Ianuzzi and Murray Godfrey appeared to favour the Sureprint bid, writing that ‘rejecting [the Sureprint] offer could result in significant adverse costs’ from litigation – seemingly favouring the Sureprint bid chiefly to avoid messy court action.

They also wrote that the second $180,000 portion of the CMYKhub offer is ‘heavily dependent’ on the orders received by the company from former Media Options clients, meaning the return to creditors could be as low as $0 if no orders are taken.

Denholm says he is ‘very confident’ that the full $180,000 will be available to creditors and questions why the liquidators painted his offer in such a bad light.

A Fair Entitlement Guarantee claim is due to be paid to employees any day now. They are owed superannuation entitlements of $215,000-$250,000.

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