Andy McCourt met with former Lindsay Yates Group Directors to clear the air over their former company’s fate following the 2017 acquisition by Whirlwind.
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| Andrew Cester at Whirlwind Print, Melbourne 2015 |
“We did not leave Whirlwind with liabilities” – former LYP directors baulk at Whirlwind’s Andrew Cester’s claims.
• LYP paid off $1.5 million in debts owed to suppliers, only $36k left outstanding – due to be paid out had Cester paid instalments.
• Whirlwind were supposed to be paying monthly instalments but stopped in January 2019 – legal action being taken to recover what is owed
• Whirlwind DID NOT move LYP’s Heidelberg SM XL105-6+LX to Melbourne, it was reportedly sold to a UK dealer for over $900,000.
Companies can go broke and into administration, it’s a fact of life all too apparent in both the commercial printing and, lately, the wide format sector. There are however, ways to handle difficult trading times and what to do when the books won’t balance in the black.
When Andrew Cester’s Whirlwind Print Pty Ltd bought quality Sydney printer Lindsay Yates Partners (LYP) in October 2017, there was considerable positive fanfare, with all staff retained and a new era of Whirlwind’s entry into the NSW market. The deal was carefully negotiated by the directors to ensure creditors were paid out and staff entitlements would be honoured. In order to accomplish this, a separate company, LYG Services, was registered into which Whirlwind was to pay money to continue to service the staff entitlements after LYP had covered 40% of them. The directors themselves were to continue on for four years, with regular payments made by Whirlwind.
The buzz about the new expansion rapidly changed into one of changes in direction, redundancies and non-payment of debts by the company Whirlwind had registered, Whirlwind Print (NSW) Pty Ltd. The full amount of indebtedness has yet to be calculated but looks like being in the millions, with paper merchants again taking the brunt, along with many smaller trade suppliers and even Heidelberg were stung after flying in a $50,000 main motor so the last job on the XL105 could be completed in December 2018. A deposit was paid and after that – ‘nothing’ said an internal source.
The driver of the acquisition Gis Marven, left Whirlwind suddenly in December 2017, for reasons unknown. Greg Cester, Andrew’s brother, also resigned as a director at this time to focus on the Printing Hub print management arm. Thereafter, the fate of LYP began to unravel. First, the ‘northern’ offset hub idea was abandoned, and it was to become a ‘digital hub’ using LYP’s HP Indigo 10000 and some finishing equipment. Then this idea was abandoned, and the digital press was dismantled and shipped to Melbourne. But what of the Heidelberg offset press?
Where did the money from sale of press go?
Contrary to other reports, LYP’s handsome Heidelberg SM XL105-6 colour plus coater did not get transferred to Whirlwind in Melbourne. It printed its last job on December 14th, with about 340 million impressions on the clock, was dismantled over Christmas, put into containers and shipped to an unknown overseas destination via a UK dealer, having been sold for a reported $900,000 or thereabouts. It was on the books of LYP for $500,000. This money would be useful to help pay creditors but Whirlwind appeared to stop paying its bills around January 2019. As a final disappointment to Heidelberg, they flew in a replacement main motor when it blew, kept the press running and now, six months later have not been fully paid.
Whirlwind’s last annual report filed with ASIC on May 30th 2018 revealed sales revenue of $27.6 million and a profit of $233,000, with 136 employees and Total Assets (current and non-current) of $12.5 million against Total Liabilities of $8.7 million. The speed of decline into insolvency is alarming, and liquidators Grant Thornton will be investigating thoroughly.
The astonishing aspect is that not until May 29th were the two Whirlwind companies put into external administration, with liquidator appointed, according to ASIC. Almost immediately prior to this, Whirlwind’s remaining assets including customer list, were sold to CMYKhub – but not the businesses themselves. If the revenue from the sale of these assets has been put aside for the administrator to disperse to creditors, the ATO and staff entitlements, all well and good – but has it? Time will tell.
The former LYP directors worked very hard to ensure a fair outcome over the sale of their business and are owed a very significant amount of money for completion of the sale. Within 18 months the assets have been stripped out and the purchasing companies placed into administration, with liquidators appointed.
This is not a normal tale of a printer going bust. If one is in trouble, they normally appoint an administrator early and if the business cannot be saved, the assets are liquidated and, if any surplus after administrator’s fees, the proceeds distributed to creditors and staff statutory entitlements. In Whirlwind’s case, the assets have been sold over a six-month period before appointing an external administrator.
