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ATO pursuing Picton winding up

Friday, 07 December 2018
By Wayne Robinson

Date in court: Picton Press directors Graham Kennedy (left) and Dennis Hague

Struggling WA outfit Picton Press is back in court on December 18, as the Australian Tax Office pursues its winding up order against the debt-ridden company.

The court case has been scheduled and adjourned several times since May, the latest on November 27, as the Picton administrator Cor Cordis seeks to come to a deal with the ATO. The December 18 date could be make or break.

The ATO voted against a proposed Deed of Company Arrangement (DOCA) put together by administrator Cor Cordis, which sees the company only offering between 1c and 2c in the dollar to the $2.25m owed to unsecured creditors. The ATO is the largest creditor with a $1.3m claim, meaning it would only receive between $13,000 and $26,000 and would have to write off at least $1,274,000 of its $1.3m.

Typically the Tax Office takes what it can from the administrators, but seems to have changed tack recently, with insiders believing it is under pressure from its own new multi-million dollar anti-Phoenixing unit.

Together with almost all the other unsecured creditors the ATO voted against the DOCA, however with all the employees voting for it the administrator Jeremy Nipps said the result was deadlocked, and cast his own vote in favour, leaving creditors at the meeting stunned.

Rival Perth printers, and printers around the country, are fuming at the DOCA process, which will effectively enable Picton to shed almost all its $2.25m debt, and only have to pay between $22,500 and $45,000 to the unsecured creditors. Other printers point out that they have had to price their jobs to pay their taxes, paper and consumables costs, while Picton effectively has not.

Picton got into trouble four years ago when it bought a new B1 ten-colour press at the same time as the WA economy tanked. When the ATO launched its winding up order in May directors Garry Kennedy and Dennis Hague put it into voluntary administration. Since then it has continued trading, and came through the controversial meeting to get the DOCA across the line.

It is also facing issues of paper supply, and with national merchants Ball & Doggett, Spicers and local merchant Stockman all on the creditors list none is likely to get insurance to be able to supply Picton, even if they wanted to. The source of Picton’s current paper supply is unknown.

Picton also has secured creditors, to which it owes around $5.5m against various properties.

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