ATO agrees to adjournment in Picton case

ATO agrees to adjournment in Picton case
Picton Press has four weeks to negotiate with the ATO over its $1.3m tax bill

The Australian Taxation Office has agreed to a four-week adjournment in the case it launched to reclaim $1.3m in unpaid tax from Perth printer Picton Press.

The case was due to go before the Federal Court in Perth last Friday but was adjourned to a later date so Picton Press directors Gary Kennedy and Dennis Hague could meet with department officials and negotiate a resolution to enable them to continue to trade.

Picton Press went into voluntary administration in May 2018 with $9m debts but was able to continue trading and keep 30 people employed after creditors agreed to a Deed of Company Arrangement (DOCA) dependent on certain conditions.

At the time $6.8m was owed to secured creditors, made up of a number of banks, with $3.5m due to unsecured creditors and $660,000 in outstanding staff entitlements, including redundancy pay and superannuation.

Under the DOCA unsecured trade creditors owed less than $10,000 would receive full repayment, while those exceeding $10,000, including the ATO and a key paper supplier, would get just one to two cents in each dollar.

The agreement was that Picton would pay $205,000 to an unsecured creditors account four weeks after the vote, with a further $275,000 due on November 28, 2019.

This plan was put into action last November after the vote but hit a roadblock on December 21 when the ATO re-launched action to wind up the company over the unpaid tax debt.

http://www.proprint.com.au/News/392752,picton-press-hopeful-ato-action-fails.aspx

 “The case was meant to be heard last Friday but it was adjourned for a month with a view to trying to resolve the issues that the ATO has continued to have,” Cor Cordis administrator Jeremy Nipps, who constructed the DOCA with the Picton directors, told ProPrint.

Kennedy and Hague had sought the adjournment and Nipps says the fact the ATO has agreed to it is a good sign as it shows a willingness to try and find a resolution without incurring legal costs to wind up the troubled printer.

 “We will meet with the ATO to try and understand further and in a little bit more detail what their concerns are with a view to try and resolve their concerns commercially but obviously if they can’t be resolved then that’s when the court needs to get involved and for them to form a view,” Nipps said.

Nipps is hopeful the matter can be sorted out without having to go to court to save money on court costs which would be of detriment to creditors.

“There is still uncertainty because they ATO has the application so it’s impacting not just the trade but the employees are also uncertain about what is going to happen with job security. The implications and the course of action that has been taken impact many people.”

Nipps said further adjournments could be applied for if necessary.

 

Source:

Copyright © 2019 Haymarket Media. All rights reserved. This material may not be published, broadcast, rewritten or redistributed in any form without prior authorisation.
Your use of this website constitutes acceptance of Haymarket Media's Privacy Policy and Terms & Conditions.