INDUSTRY DISQUIET OVER STARLEATON

The final months of Starleaton are causing disquiet among the local print and supply communities, with printers asking why the company was requesting advance payments.

At least half a dozen printers have claimed they are out of pocket, saying they made advance payments for goods they did not then receive. They  face an uphill battle to get any of their funds back, with the chances of actually receiving any significant cents in the dollar looking slim.

While keeping tight-lipped in public, other industry suppliers are far from happy with the unfolding story, believing the Starleaton situation may reflect on the industry as a whole.

In its report to creditors, the administrator Cathro & Partners said that liquidation was the only option, and said it had identified that the Starleaton companies were likely insolvent from mid-2023, and possibly as far back as two years prior to that.

Starleaton went into voluntary administration on 19 January, with the administrators currently assessing whether a late DOCA (deed of company arrangement) offer has got any legs, but even if it does get up it will mean creditors taking a significant haircut.

Starleaton is estimated to have up to $29m worth of debts and little in the way of realisable assets. Much of the debt is to related parties.

Trade creditors are owed $3.56m. SDS family trust is owed $6.56m, company founders Peter and Lea Eaton are owed $5.4m plus interest.

Stock value is around $4.3m, but that is almost all unavailable to creditors as it has PMSI purchase money security interests on it. Fixed assets are negligible at $400,000. Debtor invoices, factored by Octet Finance, stand at $1.58m, and some are from businesses that are themselves in liquidation. The ultimate holding company SDS Bidco owes Starleaton $6.3m, but SDS Bidco is itself in administration.

Apart from the family, Octet and the NAB are the other major individual creditors. Behind them in the queue, and in front of any other unsecured creditors, stands the ATO, which is owed $623,000, and employees, who are owed some $1.3m, which includes unpaid wages, super, long service leave and annual leave. Most of that, apart from the Super, will be paid under the Fegs scheme, the tab picked up by the taxpayer. Amex is owed $474,000.

Starleaton’s suppliers are in for significant amounts, Canon Production Print topping the list with $512,000 outstanding, followed by Swiss flatbed cutting developer Zund at $385,000 and German media supplier Neschen at $355,000 and Elof Hanssen $123,000.