Action Media – the latest media company to be wound up in the face of a slump in advertising revenue – has just over $50,000 in assets to cover more than $1.2 million in creditors claims.The media company was founded by publisher Sean Mitchell
Action Media – the latest media company to be wound up in the face of a slump in advertising revenue – has just over $50,000 in assets to cover more than $1.2 million in creditors claims.
The media company was founded by publisher Sean Mitchell in 2006 but was placed into liquidation earlier this month.
In the first liquidator’s report, released this week, liquidator Gerry Rea estimated that there would be a deficit of $1,164,403, with just $52,944 in assets to cover creditors.
As preferential creditor, the IRD is owed $342,761, with unsecured creditors owed $753,591.
Action Media’s titles include NetGuide, GameConsole, ConnectMe, IT Brief, Telecommunications Review, The Channel and TechDay, but these publications are continuing under new companies recently set up by Mr Mitchell, with just $15,000 worth of publications listed as assets in the report.
He told NBR last week that no subscribers, readers or staff members would be affected by the liquidation and said that it was the result of a legal structure change.
But in a statement made as part of the liquidation report, he said the company failed because of a halving in advertising revenue, a drop in subscriptions and a significant debt burden due to the prices paid for publications in 2007 and 2008.
“In late March it became clear the interest, penalties and repayments for this debt exceeded the business’ profit potential in the short term future.”
As Action Media did not own the mastheads of had lack of clear title, they could not be sold to help.
Mr Mitchell said a $126,000 injection of capital in recent months was not enough and that he met with liquidators after exhausting his personal resources.
Creditors have until June 10 to file a claim with the liquidators.
