Media Options battle to be decided August 28

The liquidator of Bhaskar Datta’s failed Media Options trade printer is to recommend the business be sold to entities owned by Datta’s sister-in-law for just $213,500, less than half the up to $430,000 CMYKhub offer.

Creditors of Media Options – which crashed last September – are owed $3.3m, and will finally choose a buyer for the collapsed trade printer at a meeting on August 28.

There are two competing offers on the table, from CMYKhub and Sureprint, a company run by Amrit Chandra, the sister-in-law of former Media Options director Bhaskar Datta. Nothing is known about Chandra, and she has no LinkedIn profile.

A clearly frustrated CMYKhub chief executive Clive Denhom says: “The liquidators do not seem to see an issue with selling to a related party effectively run by Bhaskar Datta.”

“This was supposed to be over months ago but the liquidators clearly never had any intention of selling the business to a third party like us.”

[Related: Media Options court battle]

The effect of the proposed deal by the liquidator will be to shovel Datta’s $3.3m debt onto the rest of the industry, leaving the business of similar clients, work, equipment and staff, minus the debt, in the hands of Datta’s hitherto unknown sister-in-law.

Already furious industry sources are indicating they will be calling for trade suppliers to boycott Sureprint if the deal goes through.

The Sureprint offer is a cash payment of $213,500 in 24 interest-free monthly instalments, meaning Sureprint will pay only $8895 a month.

This compares to the CMYKhub offering of $180,000 (including $50,000 already paid 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 what liquidators David Ianuzzi and Murray Godfrey from Veritas Advisory are not telling creditors is that if his offer is accepted, Sureprint would 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.

In their report to creditors, the liquidators lay out the competing offers but it is clear they favour the Sureprint bid and are encouraging creditors to accept it – despite the creditors committee twice favouring the CMYKhub bid.

In their comparison of offers, the liquidators say 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 are painting his offer in such a bad light.

The offer is also dependent on the liquidators obtaining a court order forcing Sureprint and Datta’s other related entity Sydney Print Hub, which 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.

The liquidators wrote that ‘rejecting [the Sureprint] offer could result in significant adverse costs’ from litigation – seemingly favouring the Sureprint bid chiefly to avoid messy court action.

At the same meeting, Veritas will ask to be given up to $46,324.50 plus GST in additional fees.

They also mentioned concerns that the Bankstown facility would be closed and staff would lose their jobs if CMYKhub is successful. Denholm says it is too early to tell if production will be continued there.

A Fair Entitlement Guarantee claim is due to be paid to employees in the next two weeks. Employees are owed superannuation entitlements of $215,000-$250,000.

[Related: More of the Media Options saga]

Denholm says CMYKhub has been taken aback by the drawn out proceedings, now almost a year after the company collapsed.

“From the very beginning there were challenges. Firstly the business was actually sold to Bhaskar’s sister in law just two days after Bhaskar, his accountant and Veratis met,” he says.

“This was prior to the voluntary administration. The extent of this sale agreement was not disclosed at the creditors meeting despite three separate people questioning it.

"There was an extremely strong recommendation from the administrator for the creditors to accept a deed of company arrangement and let Bhaskar trade on.

"We had a lot of trouble getting answers to questions to allow us to put in our bid with delays of over two weeks in getting response to emails.

“Our bid was accepted by the creditor committee twice and despite receiving a commitment by the administrator to take action to recover the assets we have had nothing but delays.”

Iannuzzi last month defended his handling of the sale and denied he was favouring any side over the other.

“I have remained independent from the get-go. Whatever is thrown at me, be it from Sureprint or a hungry buyer, I have to send it to the creditors,” he says.

“Both parties want the business and I’m trying to play umpire in the middle. I’m doing everything I can to keep all the stakeholders happy.”

Iannuzzi told ProPrint in February when the agreement with CMYKhub was signed that “the future income of the business from the new reputable owners is safer than under the current ones”.

Major creditors that will be asked to choose between the warring suitors 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, with a host of smaller trade creditors.

[Related: See you in court!]

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