Joint liquidator Geoffrey Davis from Rodgers Reidy told ProPrint that the company had zero assets.
The biggest debts to trade creditors so far identified by the liquidators include $3.5m to CPI Paper, $1.55m to Angus Agencies and $118,150 to Fujifilm.
The company owed $4.5m to secured creditor NAB. Part of the bank’s debts are believed to have been realised through the sale of real estate property owned by Quality director Paul Canty.
Davis said: “The reality is that the sale of the assets isn’t bringing in the money to pay out the secured creditor’s debts. That $4.5m was the director’s estimate of how much the bank would come up short.”
He added that the next stage in the insolvency process would be to investigate why the company went into liquidation, which could take months.
“We take possession of the books and records. We dig through all that information. We interview the director,” said Davis.
Fujifilm national credit manager David Hunt told ProPrint that the situation was “10 times worse than it was thought”.
“My understanding is there are [no assets left to realise debts]. The bank [NAB] are left with a shortfall after securing assets, proceeds from the sale of the business, debtors and the equity from the sale of the property.
Hunt said that he thought some creditors had personal guarantees with Paul Canty, and expected those creditors with guarantees to commence legal action against the director.
The list of trade creditors includes dozens of debts under $100,000, from $242 owed to laptop outlet Oztech Business Equipment to $98,617 owed to real estate CB Richard Ellis.
Hunt expected there would be “a ripple effect” across the industry. “You’ll see some smaller guys just simply not able to meet their obligations and may even go into receivership, liquidation or bankruptcy themselves.”
Management consultant Lindsay Aitken, who was acting for a creditor at yesterday’s meeting, told ProPrint his dealings with Paul Canty dated back a decade, when he was involved in Canty’s former company Quality Images Australia, which went in to liquidation around 10 years ago.
He said he thought the chances of unsecured creditors realising any of their debts were “quite slim”.
Canty appointed Rodgers Reidy as voluntary liquidators on 15 June.
Paul Canty could not be reached for comment.
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