Media Options collapse: $3.3m claims, no buyer found, key meeting on Friday

Friday is "D-Day" for Media Options Group as creditors vote on whether to allow the firm to continue after its $3.3 million collapse.

The Sydney firm, which is the parent of National Trade Print, collapsed on 26 September, with David Iannuzzi from Veritas Advisory appointed administrator.

Iannuzzi told creditors at a meeting on 4 October that Media Options had net debts of $2.5 million; creditors are owed at least $3.3 million but there are $800,000 worth of secured assets.

Iannuzzi added that the claims figure could rise.

Heidelberg Print Finance has a claim of $1.6 million, most of which is secured. Heidelberg Australasia managing director Richard Timson was in meetings and could not be reached for comment.

Fuji Xerox has a $134,000 claim and Paperlinx business Spicers has a $100,000 claim. Both companies declined ProPrint's request for comment.

The Australian Taxation Office also has a claim of $762,000, while staff have unpaid superannuation entitlements of $215,000 to $250,000, according to the report.

Iannuzzi told ProPrint that Veritas had tried to sell Media Options as a going concern, but that it now looked unlikely a buyer would be found.

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He said Veritas had received about 15 enquiries, two of which were serious, but that the leading contender had recently backed away from signing a deal.

Media Options has been trading under license through two entities, Sureprint and Sydney Print Hub, since it entered administration, according to the report.

Media Options' director, Bhaskar Datta, told the creditors meeting that he is the father of one of the Sureprint directors, Rahul Datta, and the brother-in-law of another director, Amy Chandra.

Some of the creditors raised questions about phoenix activity. However, Iannuzzi ruled that out. "ASIC have accepted my view that there was no phoenix activity," he told ProPrint.

Iannuzzi noted at the meeting that the equipment that had been transferred to Sureprint had been sold at above-liquidation value.

Bhaskar Datta has proposed a Deed of Company Arrangement that would allow Media Options to continue trading.

Datta's proposal is for the company to honour agreements with financiers such as Heidelberg, pay staff all their wages and superannuation, and provide a return to unsecured creditors of 8-10c, said Iannuzzi.

Creditors will vote on the proposed Deed of Company Arrangement at a meeting on 1 November, he said.

[Related: Richard Timson calls for credit reform]

"The business is still trading under license and the proposal we've received from the director is that the business will continue subject to creditor approval. This Friday is effectively D-Day for the company," Iannuzzi told ProPrint.

Datta had not returned ProPrint's call at the time of publication.

Datta told Iannuzzi that Media Options collapsed due to a decline in revenue and unsustainable overheads, which included a monthly payroll of $120,000, according to Iannuzzi's report.

Media Options suffered a big blow in October 2012 when it lost two key sales representatives who were generating about $200,000 in monthly sales, according to the report.

"The director noted that the company had employed a large number of staff with a view to grow the business, however the reality of the situation meant the company was eventually unable to support the overheads," according to the report.

"The director advised that in September 2013 the company's cashflow had dried up and a factoring facility with Cash Resources had ceased due to various disputes with debtors.

"At that stage the director decided that it was in the best interest of the company to have the administrators appointed to the company to deal with the financial issues it faced."

[LinkedIn: Can a failed company really get back on track?]

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