The creditors’ report from 10 April said “the insolvent trading claim could [have been] in excess of $1.4 million” as the Sydney printer had been trading at a loss since at least the 2009 financial year.
However, director and majority shareholder Peter Edwards told ProPrint the company had not been trading while insolvent because he had always held a reasonable belief that the company would be able to pay all its debts and on time.
He also said that if he and his wife – “the largest creditors by far” – waived the money they were owed by Good Impressions, the company would have net assets of $700,000 to $800,000. “That is probably a better balance sheet than most printing companies in Australia let alone Sydney,” he said.
Administrator John Vouris of Lawler Partners told ProPrint the question of insolvency would no longer concern him if the company’s trading future was secured – although ASIC could still investigate.
Vouris said the creditors had decided to maximise their returns by agreeing at an 18 April meeting to keep Good Impressions alive. All that remains is for Edwards to sign the Deed of Company Arrangement by 9 May. Otherwise, the company will be placed into liquidation – and the question of insolvency will again become relevant.
A liquidated company would have debts of about $7.2 million and realisable assets of up to $1.9 million, according to Vouris. Under a deed, the debts would be reduced to about $1.6 million, as the related party creditors would not be claiming.
NAB, one of the secured creditors, says it is owed $1.7 million for a leased Heidelberg Speedmaster CD102. The employees are owed $495,000, although that is all in entitlements rather than wages. Idoltest, an unsecured related creditor company controlled by Edwards, is owed $2.1 million.
Under the deed, the company will remain in administration for 18 months but with control reverting to Edwards, said Vouris. Employee numbers will be cut from 31 to 21. Employees are expected to receive all their entitlements, but unsecured creditors will probably recoup only 4.6 to 7.4 cents in the dollar.
The report said Good Impressions recorded a combined net loss of $1.7 million in the last three financial years, during which its revenue fell from $10 million per annum to $7.8 million.
The company also lost $1.3 million between 1 July 2011 and 29 February 2012 on revenue of $3.8 million. The report predicted a further net loss of $153,000 between 1 March and 30 April on revenue of $880,000.
Good Impressions continued trading after entering administration on 5 March in the hopes of attracting a buyer.
The report noted four expressions of interest, but the sole offer, from financial services company Morrison Securities, was withdrawn on 3 April.
Vouris said Edwards had been trying to organise a joint venture with two other companies, although Edwards said that would no longer be going ahead.
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