CPI shares suspended from ASX

Court case against Beaver Press marks one of CPI’s final acts as the paper supplier takes initial steps towards removing itself from the stock exchange.

Last week, the Supreme Court of Victoria approved the takeover of the paper merchant by PagePack. CPI has now requested its shares be suspended from trading on the ASX as of 2 May this week.

The decision marks the end of an era, as CPI is one of the few publicly listed companies on the supply side of the graphic arts. PE-backed PagePack intends to take the company private.

The final moments of the public company, however, were marked by a decision against it to pay $2,062,353.40 into a court trust because of fears that it may be financially unable to secure money held from the forced sale of properties owned by former Beaver Press owner, Robert Francis and his wife. The properties, in Watson's Bay and Lindfield were sold for $1.9 million (with interest $2.0 million) with the original mortage under dispute.

Much of the case involved the ability of CPI Graphics to sustain the loss from the implosion of Quality Group last year.

Justice Brereton’s verdict was a massive blow to CPI, following ongoing hearings throughout March this year. “In my view, the plaintiffs have established that … there is a significant risk that [CPI] Graphics, if required so to do in a judgement at the end of the proceedings, may be unable to refund the mortgage proceeds received by it on the sale of the Watsons Bay and Lindfield properties together with interest,” he said.

“Accordingly, that having been established, Graphics is bound by its undertaking to pay such amount and interest up to the date of payment into Court.”

Justice Brereton has ordered that CPI Graphics pays the money by 15 April 2011. According to a report, an appeal against the verdict is imminent, but either way it will have no effect on the sale of the company. Cassell was not available for comment at the time of going to press.