By Jon Robinson

Andy Patel opens up a PDF on his desktop, eager to explain his side of a bankruptcy story that has gripped Toronto’s tough printing community for months. Dated July 5th, 2004, the document is entitled Energraphics Print & Design Group Inc.

It is clearly signed by that company’s directors, who resolved to borrow $4-million from Prodigy Graphics, of which Patel is majority owner and CEO.Patel then offers to show his bank account or any other loan papers that might be necessary to prove his innocence. He scrolls the screen for a July 9th promissory note and passes over rasterized front and back images of an Ontario driver’s license. He pauses to explain that the license belongs to Beaumont Chorny and why he has it on file. Chorny is the key figure behind the eventual formation of Howell Energraphics.

The ball began rolling in July 2004 when Energraphics, supported by Prodigy’s loan, made an asset purchase of Versatel and then merged its book of business and assets to Howell Printing. Then Energraphics merged with Howell to create Howell Energraphics. Chorny’s plan, which is being investigated by the forensic accounting firm Grant Thorton, was to then sell Howell’s printing equipment and operate as a brokerage firm with newly combined sales revenues of around $14-million.

Setting the expectation that it would have no printing equipment, Howell Energraphics would need a printing partner and Prodigy’s $4-million loan was meant to ensure a preferred partnership. But, Energraphics was declared bankrupt in August 2005 after the directors did not bother to file a restructuring proposal to its bankers. A long list of creditors – made up of paper companies, printers and technology vendors primarily based in the Toronto area – were owed millions of dollars and they pushed for an

immediate investigation.

After securing $1-million, Prodigy was still Howell Energraphics’ largest creditor and Patel estimates that he continues to lose around $30,000 each month because of his effort to gain printing capacity. In 2000, Prodigy built an opulent 150,000-square-foot plant that is designed for pure volume printing. To this end, Patel signed a deal in October 2004 to purchase North America’s first Komori System 38 web offset press. Prodigy, a trade-only printer, had boldly stepped across the sheetfed threshold with a machine capable of producing 60,000 impressions per hour.

Delivery of the System 38, originally scheduled for summer of 2005, was delayed. Prodigy instead installed a half-size Komori System 20 found somewhere around San Diego. Patel expects the full-size web to arrive this month and he will run both. “I know there is an opportunity to make money – to implement our way of thinking – in a process we have not yet done,” he says. His vision of Prodigy’s current operating platform can be directly linked to a day in 1989 when he discovered a technology called Automatic MakeReady (AMR).

Komori might agree that they have overlooked the marketing potential of AMR. As other vendors chased JDF-based standards strategies that were completely foreign to most commercial printers, Komori, for more than 10 years now, has been evolving true mechanical automation to set up press makeready in a matter of minutes. “I call it the production button,” says Patel, delighted with his quiet manufacturing discovery – “I was ahead of the game.”

Patel is a schooled craftsperson and uses that knowledge to lead one of the influential printing companies in the heart of Canada’s printing engine – Toronto. In 1989, Patel learned to bottle up this craft knowledge and let his manufacturing mind flow, as he remembers, “The tooling charge that was made to the customer virtually started disappearing.” His vision and manufacturing platform was so precise that it drove the price of printing down through the floor. In doing so, he made admirers, many enemies and tons of money.

Read the complete story in January's PrintAction.

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