False figures land business in court
A CASE involving the sale of a Coffs Harbour printing firm has been heard before the District Court of NSW.
Upintheair Pty Ltd (UPL) and its director Jamie McKinnon have been ordered to pay more than $220,000 for misrepresenting trading figures during the sale of Pepperprint Colour Printers to Business Custodians Ltd (BCL) in 2013.
The court heard that prior to the sale, BCL director Bruce Dwyer told Mr McKinnon the business would be bought on the condition there was a proven net profit of more than $400,000 over a 12-month period.
The court was told UPL provided financial statements to BCL disclosing printing sales of $897,351 and a net profit of $404,371 for the 2012-13 financial year.
But shortly after the $950,000 settlement, a book-keeper discovered anomalies with invoices in the financial records, showing about $100,000 of the asserted $897,351 in sales had not been gained from printing sales, the court was told.
The court heard Mr McKinnon had admitted the invoices were fictitious, saying he only created the invoices when he became stressed about the completion of the contract.
The court was told he had offered to resolve the dispute by transferring about $100,000 of printing machinery to UPL. The offer was rejected.
The court also heard a cross-claim by Mr McKinnon against Mr Dwyer for $100,000 in vendor finance which had been included in the contract of sale.
Judge Michael Elkaim awarded BCL and Mr Dwyer $228,384.87 for the misrepresentation claim, and awarded Mr McKinnon $115,219.90 for the cross-claim.