Creditors of collapsed software distributors receive rescue deal

Creditors of collapsed software distributor Manaccom will receive up to 100c in the dollar after the company’s former owner, listed technology company Jumbo Interactive, said it would make a $500,000 payment.

Manaccom collapsed into administration on January 31. The business, which sold software from McAfee, Serif and MYOB and hardware from Logitech and Geunius, posted a trading loss of $3.8 million in 2009-10 and Jumbo decided it could no longer carry the struggling subsidiary.

The business was placed in the hands of administrators Nick Harwood and Richard Hughes of accounting firm Deloitte, but immediately ceased trading, with the loss of 37 jobs.

However, Jumbo, which now runs an international lottery business, has stepped in to ensure creditors will not be left out of pocket.

Yesterday it announced it would make a $500,000 contribution to creditors via deed of company arrangement. This will ensure creditors receive a return of up to 100c in the dollar, or at least 43c in the dollar, depending on the size of creditors claims and asset sales.

The administrators have recommended the deal to creditors, who will vote on it on March 7.

Jumbo chief executive Mike Veverka told SmartCompany the deed of company arrangement “should be the final chapter in a story that started out pretty well but pretty quickly turned sour”.

He says that when Jumbo bought the business in 2007 it was travelling well, but a “single bad deal” with McAfee proved difficult to recover from. A deteriorating market simply compounded Manaccom’s woes.

As the software business was struggling, Jumbo’s lottery division was performing well. Jumbo’s half-yearly accounts for the six months to December 31 show the company posted a profit of 3.3%, up 185% on the previous corresponding period.

Veverka says he is looking forward to putting the affair behind him.

“It would be nice not to have the distraction of an underperforming business. They tend to suck up a lot of time of focus.”