Creditors for Reacon Australia will meet tomorrow to vote on the Deed of Company Arrangement after being placed back into voluntary administration by the Federal Court of Australia two weeks after being placed into liquidation.

Andrew Blundell from Cathro & Partners has confirmed that an application was made to effectively reverse the decision from placing the business into liquidation on Friday 9 May to returning it to voluntary administration on Friday 23 May.

“Last Friday (23 May), an application was heard in the Federal Court of Australia to seek leave of the court to appoint Simon Cathro and myself as voluntary administrators for the purposes of allowing creditors to vote on a revised Deed of Company Arrangement,” Blundell said.

“The Federal Court provided that leave and subsequently we issued a further report to creditors last Friday detailing the revised Deed of Company Arrangement proposal and calling a second meeting of creditors this Friday to vote.

“Ctrl Print who were the original petitioning creditors for the winding up application did not oppose the leave application and in fact asked to be removed as defendants in those proceedings so accordingly the orders were made unopposed,” Blundell said.

The original Deed of Company Arrangement put forward by Vik Gulati from Westman Printing has been updated to remove previous ambiguity around the entitlements for staff and these amendments are outlined in an updated Creditors Report distributed last Friday.

“The Deed of Company Arrangement has been updated to ensure the payment of all entitlements to all staff and also clears up any ambiguity identified during the first creditors meeting,” Gulati said.

“It is our intention to ensure all staff from the three trading entities will continue to receive the same benefits and will all retain their jobs if this is Deed of Company Arrangement is approved,” he said.

To pass, the Deed of Company Arrangement to be successful requires 50 per cent of creditors in number and 50 per cent in value to vote in favour of the proposal.

The second creditors meeting is scheduled for 2.00pm on Friday 30 May.

In the updated creditors report issued last Friday 23 May, Blundell made some observations about Ctrl Print’s motivations for undertaking the court action.

The follow excerpts from are from the updated Creditors Report issued by Andrew Blundell to ASIC dated 23 May:

“Prior to our appointment, winding up proceedings had been commenced against the Company in relation to a debt assigned to Ctrl Print. Those proceedings remained on foot at the time of our appointment and were listed to be heard on 11 April 2025. Prior to the hearing, and our appointment, an agreement had been reached between the Company and Ctrl Print in relation to the settlement of the outstanding debt amount, as well as the associated costs of the application and on that basis would seek that the proceedings be dismissed.

“We are informed that the Company relied on this agreement and made the appropriate payment and accordingly was of the view that the proceedings would be dismissed/discontinued at the return date. Post our appointment, it became clear that this agreement was not going to be maintained and that Ctrl Print would be seeking to press for the winding up of the Company on the basis of the purported assignment of additional debts owed by the Company to them by Printcraft (Qld) Pty Ltd. Our former legal representatives opposed the winding up on 11 April, and the proceedings were adjourned and relisted for hearing on 9 May 2025.

“At the hearing on 9 May 2025, we requested a further adjournment until after the second creditors’ meeting, but this adjournment was not granted and instead, Registrar Schimdt appointed Mr Cathro and I joint and several Liquidators of the Company by order of the Federal Court of Australia. It had also become apparent during the course of our appointment as Liquidators and Administrators, that former employees of the business of the Companies, whom are now employees of Ctrl Print Pty Ltd, had been approaching the customers of the Companies and soliciting their business and it may be that the winding up proceedings were being used to benefit these endeavours.

“Since that hearing, we obtained a copy of the transcript to understand the Registrar and Petitioning Creditors concerns. I have then met with the Deed Proponents and their representatives with the benefit of involvement from my legal representatives, to receive a revised and improved Deed Proposal.

“Having considered that updated DOCA Proposal, we are of the opinion that if accepted by creditors, it would:

1. allow the Company to continue to trade; and

2. see a return to both employee creditors and unsecured creditors.

“Accordingly, on 20 May 2025, Mr Cathro and I filed an application with the Federal Court of Australia, which was heard today (23 May), seeking leave in relation to the appointment of Mr Cathro and me as Voluntary Administrators. The petitioning creditor Ctrl Print was named to the proceedings. Ctrl print did not oppose that application and sought our consent to be removed as a Defendant. Mr Cathro and I consented to an order removing them as a Defendant and proceeded on the application today (23 May).

“The Federal Court of Australia granted Mr Cathro and I leave to allow us to appoint ourselves as Voluntary Administrators for the purposes of allowing creditors of the Company to consider and vote upon an updated DOCA proposal. This also means that the current Court liquidation is stayed subject to the creditors meeting. It is our view that it is in the best interests of creditors overall that they be afforded the opportunity to consider the DOCA proposal and to vote on that proposal at the upcoming meeting of creditors.”

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