Only two weeks after he claimed that Daisytek Australia was not going to be affected by the Chapter 11 filing of its US parent, David Cullen has put the operation into voluntary administration.
In a statement issued to NASDAQ, Daisytek Inc. said the decision followed the ‘significant tightening of credit’ in the wake of Daisytek Inc.’s bankruptcy petition, which was filed with the US Bankruptcy Courts on May 7. Daisytek’s UK arm – ISA International, has also been placed into administration.
"The directors of Daisytek Australia and [the U.K.'s] ISA International have taken this action to preserve the going concern value of each and provide equitable return to their respective creditors," Daisytek Inc commented in the statement.
Both companies have appointed Pricewaterhouse Coopers as their administrator and, like their US parent, are claiming to expect to come out of the procedure trading profitably.
“The voluntary administrators will work with the boards and their management to develop plans for consideration by the creditors of each company. The plans are expected to include provisions that will allow Daisytek Australia and ISA International to restructure their balance sheets and continue operations, “ the statement said.
At the time of the filing, Daisytek Australia’s managing director, David Cullen, claimed the company was financially set up to continue trading, and as Daisytek's international subsidiaries were not under the US Bankruptcy Courts' jurisdiction, the local operation was unlikely to affected.
“We have no debts payable to Daisytek Inc. or any of the affected subsidiaries, and are profitable on a consolidated basis,” Cullen said at the time “This means that, for Daisytek Australia, it is business as usual.”
Cullen, who could not be contacted at the time of going to press, also maintained - earlier - that he wasn’t looking for a buyer for the local operation.
However, the events of the last week may prove him wrong.
PricewaterhouseCoopers is reported to have sold Daisytek's UK subsidiary business and assets of the Republic of Ireland businesses of Daisytek ISA, together with the equity in the Swedish and Norwegian companies, for an undisclosed sum to a newly formed entity called ISA Trading Limited, leaving room for speculation that similar fate awaits Daisytek Australia - if buyers can be found.
For more on this story, please see next week's issue of ARN.