Insurance Companies who are exposed to over a million dollars worth of debt following the $5M collapse of technology magazine publisher Derwent Howard are set to start asking questions of the administrator, after two key assets involving Sony and the Woolworths owned retailer Dick Smith, were moved to new entities only weeks before the Company was placed into voluntary administration.
One major insurance Company executive who ChannelNews spoke to yesterday said “It does appear odd how one publisher was able to rack up so much debt. It appears that as soon as credit ran out with one printer that he has moved to another printer. We are currently investigating this. We are also looking at claims that assets have been removed from the Company prior to the Company being placed into voluntary administration”.
“If as creditors and we are through our association with a particular printer who is owed a significant amount of money, we are not happy with the actions of the administrator or the investigations that should take place we have the right to refer the matter to ASIC for investigation”.
Nick Malanos, the administrator for Worrell’s has refused to explain whether he is investigating the potential removal of assets from the Company prior to the business being placed into voluntary administration. He is also refusing to say what value he has placed on the mastheads or the previous media contracts that have been transferred to new Companies.
The new Companies Citrus Media and the Media Factory are run by former senior executives of Derwent Howard. These Companies are now publishing new gaming and technology magazines some of which previous assets of Derwent Howard.
The insurance Companies including QBE Insurance are exposed to more than $1.3 million dollars in credit liability debt after it was revealed that printers, Webstar who use NCI as their brokers, the Quality Group, McPherson Printing, Stateweb, and AIW printing were being used to systematically move print contracts from one printer to another printer as credit dried up.
Now Jim Flynn the founder and director, of Derwent Howard, who earlier this year moved into the porn business in an effort to boost his fortunes is attempting to get the Company back for a mere $160,000.
He claims that he is owed over $1.3 million dollars and as such has listed himself as a creditor. However he has failed to explain how assets that were once a key part of the Derwent Howard stable are now under the management of new Companies linked with him and previous executives.
In a face to face meeting with ChannelNews Flynn, was more concerned that his home address in Balmain had been exposed than explain the removal of potential assets from the Company that could have been used to create revenue for the Company prior to it being placed into administration.
When it was later put to him that he had deliberately orchestrated the removal of assets from Derwent Howard he said “I cannot comment”.
Among the previous Derwent Howard titles now being published by new Companies linked with Jim Flynn and Nick Cutler former Managing Director of Derwent Howard are the Official Playstation Magazine and the new Dick Smith Magazine Tech Living.
Derwent Howard fortunes started to unfold after the Company was dumped by Future Media of the UK this resulted in Flynn and Derwent Howard suing Karl Penn.
Karl Penn the Managing Director of Future operations in Australia, was employed by Derwent Howard Pty Ltd, before resigning in Feb 2008 to join Future Publishing. Shortly after Penn resigned ASIC documents show that Derwent Howard Pty Ltd changed its name to Pub Media Pty Ltd. Shortly after this in March 2008, Pub Media Pty was placed into administration according to ASIC records.
Penn was never employed by Derwent Howard Media Pty Ltd as we previously stated.
It is believed that Future walked away from a deal with Flynn because at the time, the Company had “significant” debt and the directors were asking too much for the business.
A key player in the Derwent Howard saga is accountants Vlahos & Co Chartered Accountants at Parramatta Road Stanmore NSW, this is the Company that has been advising Flynn and is the registered address for several Flynn owned entities including S&D Pty Ltd who publish the Sexy.Net magazine which lists all sorts of perversion as well as the sale of sex toys and adult DVD’s.
They are also the registered address of the Media Factory, who is now publishing several magazines including the Official Playstation Magazine for Sony Computer Entertainment.
Sony executives at SCE have told executives at one media Company recently that they were aware that the OPSM publication had been moved into a new publishing entity. Howeve Sony Computer Entertainment, they have refused to comment, on whether they knew that Derwent Howard was about to be placed into voluntary administration.
The Director and secretary of Media Factory is shown in ASIC documents as Flynn, James Derwent, of Balmain NSW. He is listed as being born on 21 Aug 1972 -London UK. He was appointed on 26 March 2009. This was a period when several printing Companies were demanding payment along with the Australian Tax Office who is owed over $501,000.