Troubled Western Australian printer Picton Press has been put in liquidation with a clear majority of creditors voting to wind up the indebted business at a meeting in Perth.
Around 13 creditors attended the meeting at the offices of administrators Cor Cordis on Tuesday with the majority voting to terminate a controversial Deed of Company Arrangement (DOCA) that was struck in November 2018 that allowed Picton Press to continue to trade despite having $9m debts.
Cor Cordis aministrator Jeremy Nipps confirmed the meeting outcome to ProPrint and that all operations have now ceased at Picton’s factory.
The directors of Picton Press put the business in voluntary administration in May 2018 with debts including $3.5m to unsecured creditors, $1.3m in tax and $660,000 in outstanding staff pay and superannuation.
A cash flow crisis sparked Picton’s problems after it invested in a high speed ten colour KBA Rapida 106 perfector in 2014 as the West Australian resource boom ended and demand for print diminished.
An accountant for Picton Press and its directors Gary Kennedy and Dennis Hague was present at the meeting and voted in favour of the deal with neither company director making any comments during the meeting.
“The majority of creditors voted in favour of the resolution,” Nipps told ProPrint.
“There was concerns about the ability of the business to continue as a going concern.”
Nipps was appointed as Picton’s administrator in May 2018.
In the following months a Deed of Company Arrangement was put together by Picton’s directors with the plan ultimately voted in favour of in November 2018. This effectively allowed the business, which at the time had about 30 staff, to continue to operate.
It meant unsecured creditors owed less than $10,000 would receive full payment and those exceeding that, including the Australian Tax Office and paper suppliers, would get just one to two cents in the dollar.
But the deal hits its first hitch in December 2018 when the Australian Tax Office sought to wind it up over its $1.3m tax debt with that case remaining adjourned in the Federal Court.
Then earlier this month Nipps moved to have the business wound up out of concerns the current trading position was not sustainable.
Nipps said a clear majority voted in favour of terminating the DOCA and putting the business in liquidation and that Picton has now ceased to operate with staff advised to apply for their entitlements through the federal government.
He will now set about evaluating the assets, chief among them the KBA 10 colour which the National Australia Bank holds security over, to derive the best value for creditors. Westpac is the only other secured creditor with the remaining group, including the ATO, unsecured.
“The mood was pretty quiet there was no real questions from creditors at all,” Nipps said.
“It is really about getting through the current trading position and being able to sustain the business as a going concern and they weren’t able to sustain that so that is ultimately what happened.”
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