The Adelaide screen printer entered administration on 21 May 2012 owing $2.8 million to 169 unsecured creditors. However, it was able to continue trading after creditors agreed to a Deed of Company Arrangement the following month.
The deed obliges Graphpak to repay $400,000 in 18 monthly installments. Administrator Anthony Matthews from Anthony Matthews & Associates confirmed to ProPrint that Graphpak had been making its payments.
Graphpak's director, Ken Altschwager, will regain control of the business if the full amount is repaid. Employees will receive all their entitlements, while creditors will get about 10c in the dollar.
Altschwager said meeting the deed obligations was a battle, but was confident Graphpak would make all 18 payments and return to profit during that period.
He told ProPrint that the 12-staff operation was relying on hard work and a good reputation to make the sales needed to get back in the black.
[Opinion: Do forensic checks before extending credit]
"It's very hard, but we've got every confidence we'll get there… We've always put out a quality product at a realistic price."
Altschwager said Graphpak would be unable to fully repay its creditors even if it did return to profit.
Graphpak last made money in 2009-10, when it posted a net profit of $33,000 on $7.9 million revenue. In 2010-11, it lost $209,000 on $7 million revenue.
Altschwager said the firm was facing two main challenges: a tough market and a difficult transition from focusing on events work to corporate apparel and merchandise.
Graphpak previously supplied the V8 Supercars Championship, but the contract was cancelled when it entered administration.
It also supplied the Tour Down Under cycling race in January 2013, but Altschwager said merchandise sales were "well down" on 2012 because consumers were spending less money these days.
Matthews' initial investigation found Graphpak collapsed due to merchandise losses at certain events as well as poor internal controls and financial reporting. The investigation was suspended once the deed was agreed.
[LinkedIn: Do you have credit insurance?]
Graphpak Australia is in no way connected to equipment and consumables supplier Graph-Pak.
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
