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Insolvent trading – Printmotion broke for six months before going under

Tuesday, 24 February 2015
By Print 21 Online Article

Creditors left holding the bag for $200K as promo product printer folds under the weight of new investment in wide format as business went pear shaped.

There will likely be nothing to share out between creditors at the first meeting on 6 March in Sydney. According to a report by Worrels the liquidator, the financial state of the company is such that even under the best scenario the most non-priority creditors could hope for is nine cents in the dollar. The more likely outcome is nothing.

Initial investigations show that the business, owned by Paul Riddet and Stephen Richards, was likely to have been trading insolvent since August last year. They indicated that there was little prospect of success in pursuing the directors under Section 588G, which gives liquidators the right to recover compensation from directors for debts.

 The Australian director has insufficient means to make a payment should a claim be made. While we are advised that the director resident in the United Kingdom would likely have sufficient means to meet a claim, pursuing that claim overseas would complicate the recovery proceedings and considerably increase their cost.

Overall the closure of Printmotion appears to have been done in a responsible manner, despite the findings of the liquidators. The only potential preferential payment was $25,284 to the Taxation Office – unlikely to be recovered. ASIC has said no action will be taken against the directors.

Apart from that debt, owner Paul Riddet is owed the largest amount.

Sometimes, it just happens.

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