The flexo packaging specialist went into liquidation with Andrew Yeo from insolvency practitioners Pitcher Partners on 19 May, following a court order prompted by a petition from the ATO.
Yeo told ProPrint: “A petition lodged by a trade creditor of the company was withdrawn due to the debt being paid just before the winding up of the company and the ATO made [an] application to be ‘substituted’ in the place of the petitioning creditor on the petition to wind up the company.”
Yeo added that six of the company’s 10 employees had been retained while liquidators search for a buyer for the business.
“Continued trading will be limited to completing a small portion of work in progress,” Yeo said.
“The six employees that have been re-engaged by the company for the short-term trading are expected to be re-employed by a likely purchaser of some of the company’s equipment.
“Four unavoidable redundancies have been made at this stage. The majority of the entitlements of employees are covered by the GEERS scheme.”
Equitty’s kit base includes an eight-colour flexographic printing press, which was purchased new by the company in November 2006. The company also houses eight high-speed slitting machines and two laminators.
Yeo said investigations into what caused Equitty to founder were “at their early stages and are ongoing”.
“At this stage, however, it is relevant to note that the petitioning creditor, the ATO, was owed approximately $380,000, which is substantial having regard to the size of the Equitty Packaging business.
“This case emphasises the importance of all company directors acting proactively and acting early in dealing with their financial difficulties. An earlier approach to an insolvency practitioner may have allowed other options to trade the business out of its difficulties to have been explored,” said Yeo.
“The majority of insolvency practitioners like Pitcher Partners would prefer to spend their time exploring ways to rescue businesses rather than just wind them up.”
Equitty Packaging was founded by managing director Eric Quitt in 1993. The company expanded from its base in Sydney to open a Melbourne factory in 1997, before moving to a purpose built 2,700sqm factory in the suburb of West Sunshine in 2005.
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