The on-going saga of Reacon companies (Group, Holdings, Australia) and subsidiary Mail Marketing Works took an about-face on May 23rd, as PacPrint was coming to a close. Reacon Australia (in Liquidation) is now back into Administration, with a DOCA to be proposed while Mail Marketing Works Pty Ltd will be liquidated.
A more detailed report will be forthcoming once the DOCA for Reacon Australia is sighted, but in the meantime:
- Reacon Australia Pty Ltd was placed into liquidation, by order of the Federal Court, on May 16th. It had been under the administration of Cathro Partners, who then became the appointed liquidators.
- An appeal was lodged against the liquidation, which was originally petitioned by CTRLprint representing an assigned debt of PrintCraft (a Queensland company and creditor).
- CTRLprint representing the assigned debt of PrintCraft decided not to contest the appeal and therefore it was granted and Reacon Australia returned into administration. On 26th May a 76-page VA Report to Creditors - a modified version of the first one lodged on 8th May - was lodged with ASIC.
- Mail Marketing Works Pty Ltd:- also on 26th May, a Report on Company Activities and a VA Report to Creditors was lodged for this company (MMW, trading as mmw3degrees, a subsidiary of Reacon Group, now owned by Innovis Media, a company owned by Mr Vik Gulati who also owns Westman Printing - a major creditor). In this report, liquidation of MMW is recommended by Cathro Partners as the indebtedness outweighs assets.
Employees suffer most
All unsecured creditors suffer loss in such situations but, caught in the cross-hairs of all this are staff, both past and present, who together are owed hundreds of thousands in entitlements but cannot claim the Government FEG compensation. Only employees of companies in liquidation and with a letter from the liquidator can claim this. Employees of MMW have already transferred, or have been offered transfer, to Reacon Australia Pty Ltd and an offer of gradual repayment of entitlement - this is commendable, albeit if they decline the job transfer they could lose it all.
The situation is deeply complicated and appears wholly unfair to the former employees.
Cathro Partners have a job to do and unravelling the depth of this mess is challenging. There must be funds available to pay them for their work as administrators and/or liquidators…Mr Gulati has been providing funds to Cathro for the VAs. The rest is anticipated to come out of trading receivables - Reacon continues to trade under VA and Cathro assumes responsibility for debts incurred during the process.
Author: Andy McCourt
N.B. Andy has sent a copy of all reports and his findings related to this situation to The Hon Amanda Rishworth MP, Minister for Employment and Workplace Relations for her consideration
