The liquidator investigating the collapse of Melbourne digital printer On Demand says the total debts owed to creditors could run into millions of dollars.
Mathew Gollant from Rodgers Reidy says it could take several months before he completes his report into the failure of Michael Wu's Port Melbourne business - once described as Australia's biggest digital printer.
On Demand was sold last week to Melbourne print group Mercedes Waratah - co-owned by brothers Moody and Abbey Aboughattas - and rebranded as Data Direct Digital.
On Demand had remained open for several weeks under an interim services agreement signed with Docklands Ability Group – also co-owned by the Aboughattas brothers – since the business collapsed in July. Wu had been a partner in Docklands Ability Group until July when he was ‘dismissed’ after a dispute with the co-owner brothers, who accused him of misrepresentation.
"The company Production Printing Australia [trading as On Demand] has ceased and certain assets have been sold to an entity in the Mercedes Waratah group," said Gollant. "The creditors claims are going to be what they are...the amount could well run into many hundreds of thousands of dollars if not more. Fifty employees have been terminated and will be required to access their pay and entitlements through the government's FEG (Fair Entitlements Guarantee)."
[Mercedes Waratah Group COO Brett Chalmers said last week that some of the On Demand staff would be re-employed in the new Data Direct Digital business. "We have selected the best people, systems and assets from On Demand," he said.]
Gollant confirmed that the biggest On Demand creditors include the industry's leading digital press suppliers.
"What they are owed in relation to finance contracts and equipment contracts might be in the millions of dollars, " he said. "Some of the equipment has been collected, some is yet to be collected. Some companies might realise their assets and might be able to place a second-hand printer in a new location. That process won't be finished for a while. You don't move one of these huge digital presses overnight."
Mercedes Waratah, the new owner of the business, is also listed as a creditor. "They were owed rent," said Gollant.