Hundreds of thousands of dollars of BPA debt was over 60 days

The issue of credit control has been front and centre for many suppliers – and BPA is evidence that it is no easy matter to bring rogue customers into terms.

The book printer is now in liquidation after Glenn John Spooner from Cor Cordis was appointed on 4 July.

According to figures published in BPA’s Report as to Affairs (RATA), more than 23% of its $1.7 million of unsecured debt was outside 60-day terms.

However, there are questions marks over some of the figures in the report, which was compiled by BPA’s former directors. A number of creditors revealed different figures to those in the RATA.

According to the RATA, six of BPA’s suppliers face haircuts of more than $50,000: the three major paper merchants, Heidelberg and trade suppliers The Bindery and Pageset, which was tipped into liquidation following BPA’s bad debt.

Both Heidelberg and KW Doggett faced significant debts outside of 60-day terms, though the figures in the RATA do not necessarily tally with the suppliers’ own accounts.

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Simon Doggett, managing director of KW Doggett, said: “BPA was always a 60-day account and did not show any signs of distress via slow payment until January. We stopped supply when we did not receive our 60-day payment and then had discussions with the directors.

“Despite being promised our 60-day payment for two months, we never received it. The directors wanted to open a new trading account with a separate company however we refused to do this,” added Doggett.

According to the RATA, 68% of the paper merchant’s $187,000 exposure was beyond 60 days, but Simon Doggett said “this is inaccurate”.

“[It’s] also important to note that we had not supplied any paper for about eight weeks when the administrator was appointed as the account was on ‘no supply’.”

He added that KW Doggett would not supply accounts that were outside trading terms.

Richard Timson, managing director of Heidelberg Australia & New Zealand, said that about $30,000 of its $66,000 debt was outside of 60 days.

“This account was in trouble prior to my new management team being in place and was another example of why we took the view that the industry needed to improve its debtors position.

“Once again, I am pleased with the active adjustments our customers are making towards a mutual position that will ensure a future for us all in the industry,” added Timson.

[Related: Timson warns industry on credit]

The report showed that The Bindery was BPA’s biggest creditor. Managing director Rob Dunnett said 35% of the company’s $466,000 debt was outside 60 days.

“We were a bit of a unique supplier to BPA: the parent company of BPA is Soto, which is a shareholder in The Bindery, so there was what I considered to be marriage. There was a hell of a lot of trust involved,” he said.

“For them to get out over 60 days was not uncommon, but for an appointment of the receivers and managers at 91 days, that was quite a disappointing surprise,” added Dunnett.

It is a sad irony that according to the RATA, Pageset – which filed for liquidation soon after being hit by its $168,000 exposure to BPA – had the lowest percentage of debt beyond 60 days of any of these six major creditors.

The other group hardest hit by the collapse has been employees. According to figures in the RATA pulled from BPA’s payroll system, the leave entitlements of some of the longest-serving staff may be tens of thousands of dollars.

In fact, at least 18 employees lost their jobs with leave entitlements valued at more than $10,000, according to the report; though this includes ‘personal leave’, which is not necessarily paid out in a redundancy situation.

The employees with the lowest leave entitlements at the time of the receivership were former directors Brett Turnley and Graham Burgess, who between them had less than a day’s worth of leave accrued.

Neither Turnley or Burgess had responded to ProPrint at time of publication.

An unrelated company, NewTone, acquired certain assets and the trading name of BPA Print Group from the receivers in April.

[LinkedIn: Do you have credit insurance?]

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