Latest News

Tax Office and Picton set for 1 May DOCA date

Friday, 08 March 2019
By Wayne Robinson

Court battle: Picton Press directors Gary Kennedy (left) and Dennis Hague

The long-running legal battle between the ATO and Picton Press is set to continue to May, with the ATO continuing to contest the controversial Deed of Company Arrangement (DOCA), an arrangement which would allow the company to pay only 1c-2c in the dollar to its major unsecured creditors.

The two sides had been given five weeks to resolve their differences at the last court session on January 31, now the WA Federal Court has ordered a case management hearing between the ATO and Picton be heard by the court on May 1. Under the contested DOCA Picton’s unsecured creditors owed more than $10,000 will receive between 1c and 2c on the dollar, which would leave the ATO at least $1.274m out of pocket on the $1.3m it is owed.

The proposed Picton DOCA has caused uproar in the Perth printing community, with rival companies furious over the deal, claiming that while they have been paying 100 per cent of their tax and paper bills, and pricing accordingly, Picton will have effectively only been paying 1-2 per cent.

Picton owes another $2m to unsecured creditors and $5.5m to secured creditors. The ATO issued a winding up order against Picton last year when it failed to pay its tax bill. Picton then went into voluntary administration in May. The administrator, Jeremy Nipps from Cor Cordis, organised the DOCA and the vote, which saw all the employees, owed $660,000 between them – and who attended a meeting before the vote – put their hands up in favour, while the major unsecured creditors, including the ATO voted against. According to creditors at the meeting Nipps then declared the vote deadlocked, and cast his vote in favour.

The ATO refused to accept the DOCA, and went to court looking to reninstate its winding up order. The judge ruled against it, given that the DOCA was in place, but awarded costs against Picton. The ATO then appealed that decision in the court, and after several adjournments that appeal is now in process. In an unusual move, in addition to Picton Press itself, the ATO has named Nipps and his co-administrator Clifford Rocke as defendants, in addition to the two Picton directors, Dennis Hague and Gary Kennedy.

Picton has continued trading ever since it went into voluntary administration last May, although some employees, including operations manager Murray Scott have since moved on. Cor Cordis received $356,000 for its six month stint as administrator, from May 22 to November 29.

Picton hit trouble five years ago when it installed a new ten-colour B1 press, and virtually as soon as it was commissioned the WA economy tanked, as did Picton’s sales. They are now half of what they were when the press was commissioned, they were $3m in the six months that the company was in voluntary administration. When the press was put in the company’s annual sales were around $13.5m.

 

Comment on this article


To receive notification of comments made to this article, you can also provide your email address below.