Supreme Court probes CPS sale

Heads of OfficeMax and Linfox have been hauled before the courts for four-day discovery hearings to answer questions about the sale of failed print manager Complete Print Solutions in 2013.

CPS collapsed in February 2013 with debts of at least $2.5m, and was sold to OfficeMax for a five-figure sum, and CPS director Mark Freeman moved over with it, along with 25 staff.

The US stationery giant also bought Foxprint Solutions, a print management joint venture between CPS and Linfox, as part of the deal.

Additional liquidators appointed by the Federal Court last year at the behest of former CPS co-director Craig Stewart are said to be investigating whether the deal was conducted properly.

This includes whether it was sold too cheaply, went to market, and what the costings were – essentially whether Freeman sold it cheaply so he could have a job to go to.

Those summoned to the four-day discovery hearings, which ended yesterday, include Freeman, OfficeMax Australia managing director Charles Agee and marketing director Paul Munkley, Linfox FMCG president Greg Thomas and national print manager Robert Brundle.

When contacted after the hearings, Freeman told ProPrint CPS was ‘worth nothing’ and selling it to OfficeMax saved 25 jobs, insisting he acted above board.

Freeman says his former business partner Stewart believes process software CPS developed was worth $8.5-9m, when it fact it was worthless and not even commercialised.

Administrators at the time of the collapse valued CPS assets at just $2000 worth of furniture and office equipment.

“I don’t understand what Craig is playing at, or what the point of bringing this all up again after almost three years is. The company was on its knees and there were no options,” he says.

Freeman says after 24 years as business partners, Stewart abruptly walked out on the business shortly before its collapse without a word, and the two have not spoken since.

“If the business was worth so much money, why would you bail on your business partner and leave it high and dry? It doesn’t make any sense,” he says.

“I stood up at that creditors meeting facing those whose money we lost and I apologised. If people want to lynch me over my mistakes I understand.

“It was even more awkward because we married sisters, but they are still friends and we have all moved on with our lives, why hasn’t he?”

Freeman says CPS failed because he and Stewart had ‘not been getting along’ for three or four years and they lost focus on the business at a time when it had grown to a size where it needed extra help to manage.

[Related: CPS collapse]

He says he tried to sell the business several times while it was still in good shape but Stewart scuttled all the potential deals by insisting on too high a sale price.

Freeman worked at OfficeMax for 16 months after the CPS sale, but says this was because OfficeMax wanted him to help manage the transition and secure clients, not because of any underhanded deal.

“I would have got a job regardless, there was a lot of interest but I was bound by contract to work for OfficeMax,” he says.

Freeman has for the past year been running another print management company called Eventus, working out of the Docklands Ability Press building in Port Melbourne and sending most of his work there.

Both Ability Press and Docklands Press were owed large debts by CPS, with Ability said to total $60,000 and Docklands into six figures, but Freeman says he has worked something out with them.

A consortium of six other creditors also managed to get paid around the time of the CPS sale by banding together with Workcover Authority of NSW to launch a wind-up application that otherwise would have scuttled the acquisition, according to a source at one of the printers involved.

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