Creditors gutted by DPA $5million failure

Days after selling the business and the equipment and transferring the staff to On Demand, Melbourne-based digital printer DPA has gone into liquidation.

It has left a trail of creditors including printing companies who are unlikely to receive anything on their debt. It is believed the bank factored the debtors and whatever is left over will be eaten up in liquidation expenses.

The On Demand deal at least ensured staff received their entitlements and most of them have transferred across to the new company.  Among the outstanding creditors of DPA are Vega Press, ASF and Fuji Xerox, as well as the ATO.

The failure brings into focus the continuing strategy of businesses barely making payments while continuing to trade. They accumulate debt before offloading the business and putting the company straight into liquidation. This is becoming a significant burden to the industry with many printers and suppliers increasingly unwilling to extend credit without written guarantees.

It is rare for creditors to take the matter to court, as the likelihood of getting anything is usually remote. An exception is the current case underway in Melbourne involving the former directors of Energi Print now trading as Twenty Five Olive. In this case the creditors were successful in replacing the liquidator when the company went broke owing $7 million. It is understood the insurance company that has already paid some of the creditors is bringing the case.