EXPRESS PRINT & MAIL SOLD FOR $177,000 TO OWNER'S MUM
128950489 Pty Ltd (formerly known as Express Print & Mail Pty Ltd) owner Matthew Chadwick sold the business, assets, and brand to a new company owned by his mother Wendy Chadwick for $177,000 a month before putting the company that owned the business into liquidation.
Of the $177,000, some $90,000 was paid in cash, with the remaining $87,000 of the sale price covered with the new owner taking over $281,000 in entitlements owed to staff, covering long service leave and the like. The company known as 128950489 Pty Ltd went into liquidation at the end of July with debts listed at $4.15m.
Rival SE Queensland printers are fuming over the deal, which effectively saw the business – which is now operating from a nearby premises, with virtually the same equipment, and same staff – go to market having shed $4.15m in debts. Hearing perky adverts for Express Print & Mail on their car radios on their drive to work in the mornings is doing nothing for their blood pressure.
However, Wendy Chadwick says: “That the figure of $4.15m is grossly inflated and takes into account contingent debts (such as the lease) that have since been finalised; leased equipment which has been taken over and the instalments are being paid by the new business; and superannuation, which is being paid out over time by the new business.”
Express Print & Mail under its former owner had 52 staff, almost all of whom transferred to the new company, which was established by Matthew Chadwick in December, but sold to Wendy Chadwick on 23 May, and is now based in a new 1400sqm premises in nearby Kunda Park that was leased on 1 April for five years, at $220,000 a year.
The $177,000 purchase price for Express Print & Mail comprised $42,150 for equipment and stock, $117,000 for IP and goodwill, and $17,500 in leased equipment equity.
The Chadwicks have told the liquidator the $177,000 sale price for the digital and offset print business was fair value and was underpinned by an independent valuer’s report. The liquidator, as he is required to do under the Corporations Act, is now looking into that claim.
Plant and equipment that came from the old premises to the new included some on lease and some that was bought for a total $42,150, with Wendy Chadwick saying, “as per a valuation by a registered valuer” included a five-colour A2 offset press, two GTO presses, two high-end digital presses, a saddlestitcher, a perfect binder, other finishing equipment, and a range of prepress equipment.
When the business 128950489 Pty Ltd (formerly known as Express Print & Mail Pty Ltd) was put into liquidation it owed $398,000 in unpaid super to its staff, which Wendy Chadwick said is "being paid out over time by the new business, with all superannuation payments since 1 January this year being kept up to date". The liquidator is currently trying to verify the position in relation to owed super.
The company owed $1.25m to the ATO, $1.34m to its landlord (which Wendy Chadwick say was a contingent claim that is now finalised), $740,000 to related entities - these are debts owed to Chadwick entities that will not be repaid - and $34,000 electricity bills.
It was also in dispute over a $350,000 claim relating to its purchase of much of the equipment from collapsed Queensland printer Chameleon Group. There were no assets and no other debtors. With the liquidator charging $56,000 for its services the unsecured creditors are on track for less than a tenth of a cent on the dollar.
The Chadwicks say the $1.34m owed to the landlord is the lease payments remaining on the lease, and that now he has a new tenant that is not payable. However, with the company moving out of its old premises and not making good the factory back into three units, the landlord may not see it that way. The landlord does though have a bank guarantee from the old company for $120,000 to call on to cover these expenses.
