Creditors of the NSW arm of Whirlwind Print have been asked to pay up if they want investigations to continue as to whether the now defunct trade printer traded while insolvent.
Liquidators Grant Thornton have issued two statutory reports to creditors about ongoing investigations into Whirlwind Print and Whirlwind Print NSW which entered liquidation with combined debts of $7m in May 2019 with all staff referred to the federal government for their entitlements.
The report says the NSW arm of Whirlwind Print may have been trading insolvent not long after it purchased the Lindsay Yates print business in 2017 but investigators have been unable to confirm this due to time constraints and the inability of liquidators to access Whirlwind’s management accounts.
For the investigations to continue Grant Thornton has put out a call for NSW creditors to provide funding for future action.
The creditors spoken to by Sprinter, who did not wish to be named, have said as much as they would like to see this matter pursued they are unlikely to contribute to the costs of investigation and will wait and see what emerges from the continued investigations into the main Whirlwind Print business in Victoria which is still under investigation.
“Whilst it is apparent that the Company may have been insolvent not long after the business of LYP was purchased we have not been able to determine the date of insolvency due to time constraints and our inability to access the company’s management accounts,” the statutory report on Whirlwind Print NSW states.
“We are in the process of obtaining access to these accounts.
“Further investigations will be required in order to confirm the basis of any insolvent trading claim and whether it is commercial to pursue any potential insolvent trading claim, including an assessment as to whether the director would be able to meet any claim brought against him.”
One of the creditors spoken to said it was a “slap in the face” to be asked to contribute when his business had already lost thousands of dollars.
Creditors have been told if they would like to contribute to the fund they should contact Grant Thornton and in the absence of funding the liquidation will be finalised.
The Corporations Act stipulates company directors have a statutory duty to prevent a company from trading while insolvent. Section 588M states a director who fails to prevent a company from incurring a debt when the director is aware, or should have suspected, that the company was insolvent or would become insolvent as a result of incurring that debt is liable for an amount equal to the loss or damage suffered.
The report goes on to say that further investigations will be needed to confirm the basis of any insolvent trading and whether it is commercial to pursue one which includes whether the director would be able to meet any claim brought against him.
In the weeks before Whirlwind entered liquidation then managing director Andrew Cester sold Whirlwind’s printing equipment and customer list to rival trade printer CMYKhub.
Cester put Whirlwind’s demise on the purchase of Lindsay Yates with plans to create a NSW digital hub in Sydney never realised.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter