REACON BUSINESSES TO BE LIQUIDATED

Disgruntled Reacon company creditors CTRL Print and Printcraft have won the court battle to have Reacon Australia and mmw3degrees placed into liquidation. The Reacon companies have debts estimated to be around $9m.

The two businesses were part of the Reacon Group acquired by Westmann printing owner Vik Gulati, the day after Reacon Group owner Jahingar Khan put the businesses into administration.

Gulati was aiming to reboot the businesses, by having them put into a DOCA, which would have parked their debts while a schedule of repayments, at a cents in the dollar level agreed with creditors and over an agreed time, was to have been worked out.

However, CTRL Print and Printcraft went to court to stop the move, and succeeded, with the court Registrar today ruling that the size of the debts, $9.6m, compared to the assets of $800,000 meant that a DOCA was not in the creditors’ interest.

Gulati had offered to take over the entitlements of the staff. They will now be paid out for all but their super under the government’s Fegs scheme.

The administrator Cathro Partners was scathing in its assessment of the Reacon Group's management, and indicated it had questions about the movement of funds in the businesses .

More to come on this story.