Trends Publishing claims Callaghan actions forced creditor compromise

Friday 14th August 2015

Trends Publishing, the company at the centre of a stoush over Callaghan Innovation's decision to cancel its three year funding, says the government innovation agency's actions caused "a serious strain on the company's operations and finances", forcing it to seek a "creditor's compromise".

Trends announced Thursday evening it had filed legal action against Callaghan over the suspension and subsequent cancellation of a grant the 20 year old company, which boasts offshore and domestic operations, had won to develop a content marketing and business leads generation platform.

In a statement today, Callaghan's chief financial officer Richard Perry said Trends' legal action was "a response to court proceedings taken against the company by a number of its creditors, including Callaghan Innovation."

Callaghan suspended the Trends grant, the first time it has done so under the growth grants scheme, following a review of its use of the funding last November. It referred its findings to the Serious Fraud Office before cancelling the grant in April this year when it said Trends could be made under clawback provisions in the grant contract to repay the $332,966 it had already received.

"It is Callaghan Innovation’s view that the action it has taken to date in relation to Trends was responsible and justified in the public interest," said Perry.

In response, Trends chairman David Johnson said the company "was always going to seek redress and damages from Callaghan, following its actions in relation to the grant", which had "caused a serious strain on the company's operations and finances to the point that I reluctantly determined that a creditor compromise would be needed for the company to go forward."

"A compromise meeting was held in May and passed by the required majority of creditors," he said, but that had been challenged subsequently by five creditors, including Callaghan.

"Our current legal action is a counterclaim to this challenge, as we believe that the actions Callaghan took in relation to the review were instrumental in the position we were in with creditors."

Trends is majority owned by Johnson, a former EY Entrepreneur of the Year. and has 60 publications in the home interest and commercial design area, a digital platform connecting homeowners, professionals and suppliers, and a MyTrends project on digital lead generation.

BusinessDesk.co.nz

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