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Perth printers outraged as Picton sees off ATO

Thursday, 20 December 2018
By Wayne Robinson

 

Unencumbered with unsecured creditors debt: Picton Press directors Gary Kennedy (left) and Dennis Hague                                                                                                            The WA printing community is in uproar as debt-ridden Picton Press has managed to get the ATO’s winding up order against it dismissed, so finally ridding itself of 98-99 per cent of what turned out to be its $3.6m debt to 72 unsecured creditors.

Local printers were ‘in absolute shock’ and ‘furious’ as the Commonwealth Court dismissed the ATO’s application, slamming the decision as ‘disgusting’, ‘disgraceful’ and ‘a travesty’.

In a bizarre twist the court awarded the ATO’s costs against Picton. It is not yet known if the ATO will appeal the decision to dismiss its winding up application.

The $3.6m in debt Picton has racked up to the ATO, the paper merchants and other unsecured and trade creditors has now been translated to a maximum of just $72,000, and as low as $36,000.

Picton is no longer in administration. In the six months Cor Cordis has been running the company from May 22 to November 29 receipts in were $3.12m, payments out were $2.95m.

The Perth printing community is seething as the court’s ruling effectively means that while they have all been writing cheques to the tax office and paying their paper bills in full for the past four years, and pricing their jobs accordingly, Picton – owned by directors Dennis Hague and Gary Kennedy – has not, and now does not have to, having shed itself of more than $3.5m of its $3.6m debt.

Rival Perth printers claim Picton has been undercutting the market for years, so taking jobs from them based on unrealistic prices, and say they are the ones who are paying for it, as insurance will rise, market expectations of pricing is lower, and Picton is free to carry on as before.

The ruling means that Picton will be able to operate under its Deed of Company Arrangement (DOCA) prepared by administrator Cor Cordis, which will see unsecured creditors receive between just 1c and 2c in the dollar.

Back in October virtually every unsecured creditor voted against the DOCA, and that would normally have killed it off, but the 27 employees – who were spoken to at a separate meeting just before the creditors meeting – all voted for it, with administrator Jeremy Nipps from Cor Cordis then shocking the creditors by declaring the vote deadlocked, and using his casting vote to get the DOCA over the line.

Nipps says the DOCA is a legitimate tool to help a struggling business move forward. However one local print identity told Print21, “If this is the outcome then the ATO’s new anti-phoenixing unit is a gigantic waste of time and money. It beggars belief.”

Picton does face issues of supply, all three main paper merchants Spicers, Ball & Doggett and local WA outfit Stockman were on the creditors list, so will be unlikely to get insurance, even if they wanted to. Rumours are swirling around the Perth printing community as to where Picton is now getting its paper from.

Picton put itself into voluntary administration in May when the ATO initiated its winding up order as Picton failed to pay its $1.3m tax bill. The company had been in trouble for four years, ever since 2014 when it put in a new B1 ten-colour press, which even at the time was viewed as optimistic for the Perth market, and it was compounded by the WA economy tanking virtually as soon as the press was commissioned.

The press was installed on a business plan with sales of minumum $12m, at the time they were around $13.5m. However three years later they were less than $8m.

As well as the $2.25m in unsecured debts Picton has around $5.5m in loans from banks, secured against various properties.

2 Responses to “Perth printers outraged as Picton sees off ATO”

  1. December 20, 2018 at 2:10 pm,

    Sr
    said:

    Where the incentive for ALL the hard working honest printers around town they should be wound up
    Disgusting absolute pricks

  2. December 20, 2018 at 4:42 pm,

    free falling
    said:

    PIAA have been pretty quiet about the whole matter. Were they on the creditors list?
    The sad thing is that if Picton try to get the business running again, they will fail for so many reasons – and then more people will get hurt! Just close it down now!!

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