The Federal Court in Perth has dismissed an application by the Australian Taxation Office (ATO) to wind up Perth printer Picton Press, which went into voluntary administration in May owing more than $9 million - including $1.3 million in tax.
|Picton Press, West Perth, WA|
The ATO’s application was turned down by the court because Picton Press is now subject to a Deed of Company Arrangement (DOCA) put together by administrator Jeremy Nipps of Cor Cordis. A majority of Picton creditors – but not the ATO and some paper suppliers – voted in favour of the agreement in November.
Under the DOCA, major unsecured creditors owed in excess of $10,000, including the ATO and paper suppliers, ended up getting just one-two cents in the dollar, meaning the ATO will receive less than $30,000 of its $1.3 million tax bill.
Unsecured creditors owed less than $10,000 were expected to get up to 100 cents in the dollar under the deal. Secured creditors including Westpac, NAB and the CBA, who are owed a total of about $5.5 million, are not bound by the DOCA but agreed to continue their support of the directors to allow the business to continue to trade.
|Jeremy Nipps of Cor Cordis|
The Federal Court decision did not come as a surprise to the Picton administrator.
“We sought to have the application dismissed because the company is now subject to the DOCA,” Nipps told Wide Format Online. “I provided an affidavit, my solicitors attended and the court ordered that the wind up application be dismissed.
‘It’s good news for the directors because you don’t want the application sitting there, but we were expecting the application to be dismissed because the DOCA was executed. At the end of the day, the most significant decision was made back at the creditors meeting in November. That was the critical point. After that, everything is just a process.”
Picton Press directors Gary Kennedy and Dennis Hague can now focus their attention on rebuilding the company, Nipps said.
“Control has now reverted back to directors and the main thing is getting all these little bits and pieces out of the way so they can focus on the business.”
As part of the deal, owners Hague and Kennedy have to pay $205,000 to a creditors’ trust within a month, with another payment of $270,000 due in a year.
“We recognise that we overcapitalised in a diminishing market and a poor economy but we’ve rectified what we needed to rectify. There’s quite a few things we will do differently, and now we’ve just got to get up and running.”