A Federal Court hearing in Perth has been adjourned for four weeks in the hope that lawyers can find “middle ground” in the protracted legal fight between the Australian Taxation Office and Perth printer Picton Press over a $1.3 million tax bill.
|Picton Press, West Perth, WA|
The ATO is fighting a DOCA agreement put together by administrator Jeremy Nipps from Cor Cordis that saw Picton resume trading in November 2018 under existing owners Gary Kennedy and Dennis Hague, despite the business going into voluntary administration in May 2018 owing more than $9 million - including the $1.3 million tax bill.
Under the DOCA, unsecured creditors owed more than $10,000, including the ATO and several paper suppliers, would get just one or two cents in the dollar, meaning the ATO could receive just $26,000.
Unsecured creditors owed less than $10,000 were expected to get up to 100 cents in the dollar under the deal. Secured creditors, including major banks who are owed a total of about $5.5 million, are not bound by the DOCA but have agreed to continue to support the directors to allow the business to trade.
The ATO filed an application the federal court in December 2018 in an attempt to overturn the deal and wind up the company. After that application was rejected, the ATO went back to the court in January, filing a new application.
|Hopeful: Jeremy Nipps, Cor Cordis|
The case was due back in court again last Friday but has now been adjourned for another four weeks to allow lawyers on each side to seek some kind of settlement.
“It’s just a matter of trying to find that middle ground of what’s best for all,” Nipps told Wide Format Online.
“We don’t believe the legal action by the ATO is warranted but the ATO is entitled to take the action, so it’s been adjourned to try to resolve the matter without having to wind up the company and go into liquidation.”
Nipps said he’s hopeful that a settlement can be reached.
“I know the ATO is not overly impressed with the contribution amount but It’s not just about the ATO, it’s about what’s best for everybody. We’re hoping to have a resolution or a position agreed to commercially before it is due back before the court in four weeks.
“I’m definitely hopeful of reaching a settlement without going to court. That would be fantastic. In the next four weeks the parties will confer and hopefully try to get a resolution without the need to go through an expensive court heading, which is a costly exercise and it doesn’t benefit anyone.
“If we can resolve this without having to go through that process, it would be great. But we just have to wait and see how it plays out.”
Picton Press is continuing to operate as normal, Nipps said. “By all accounts they’re doing okay but having this over their heads just creates uncertainty for everybody, so the sooner this can be dealt with the better, and they can move on.”