Court extends bankruptcy protection for Mariner Seafoods

A P.E.I. Supreme Court judge has extended bankruptcy protection for Mariner Seafoods of Montague until April 8.
Justice Wayne Cheverie granted the extension in Supreme Court in Charlottetown Thursday after hearing representations from legal counsel.
The court was told that all parties involved in the proceedings have agreed to the extension.
In granting the application for an extension brought forth by the company's legal counsel, Cheverie said he was satisfied that Mariner has been acting in good faith in this process.
The company's lawyer, Ryan MacDonald, said the extension was necessary to continue the restructuring process and that the company's creditors would not be prejudiced by it.
Several references were made during the brief hearing to a report prepared by the court-appointed monitor in this process, Grant Thornton, which has been tasked with developing a clearer financial picture of Mariner Seafoods and the company's ability to pay down its debts.
MacDonald said it has been determined, for example, that the company would have a higher value if sold as a turn-key operation than if sold in a forced liquidation.
The company's cash flow has also proven to exceed expectations for the January to February period.
During that period the company's management was seen to act in good faith and with due diligence.
MacDonald said company president Mark Bonnell has been working with the monitor and would continue to work in a diligent manner and in good faith if the extension was granted by the court.
The seafood operation is seen as a major player in the local economy, providing employment for 250 people and purchasing fish from many area fishermen.
Much of the blame for Mariner's current situation has been attributed to the recession which has left the company holding millions of dollars worth of unsold inventory.
The company was served with a lawsuit before the P.E.I. Supreme Court for debts of over $10 million.
Bonnell is one of the only complete Island processors left in existence.
His Mariner Seafoods operation, which has an estimated payroll of $100,000 a week, could be closed depending on the outcome of this case.
Bonnell has about $3 million loaned out to fishermen and is the only Island-based snow crab processor.
Montague Mayor Richard Collins says it would be devastating if 250 seasonal jobs were lost there over the financial problems facing Mariner Seafoods.
Financial woes aside, Collins said some agreement must be found to prevent such a major job loss to the eastern region.
Active Communities Inc. is suing Mariner for failure to begin loan payments last August.
The company is also behind on payments to the Atlantic Canada Opportunities Agency.
Collins said he wasn't making excuses for the owner, but insists the 2009 fishing season - with very low prices - would have had a drastic effect on the operational profits.