Some Testori creditors may not get paid in full

Ryan Ross
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Large unsecured creditors could get about 15 to 20 per cent of their claims' dollar value over several years

Testori's Bloomfield, Prince Edward Island plant seen here in the centre, in blue. The plant is located in the West Prince Business Park in Bloomfield. Testori also has a plant in Slemon Park.

Many of the Testori group of companies’ creditors could end up getting less than they’re owed, according to documents filed as part of the creditor protection process.

CLICK HERE FOR SEARCHABLE LISTS OF CREDITORS FOR WIEBEL AEROSPACE AND TESTORI AMERICAS

Under a proposed plan, unsecured creditors who are owed $1,000 or less would get the full amount in six months, while larger creditors would get about 15 to 20 per cent of the dollar value of their claim over a period of two to three years.

Opposition Leader Steven Myers blamed the government for the current situation and said Premier Robert Ghiz has turned his back on Island businesses affected by the Testori group’s financial problems.

“Who knows what end will come to some of these companies because of it,” he said Thursday.

Last month, Testori Americas and Wiebel Aerospace were granted creditor protection and a P.E.I. Supreme Court judge appointed PricewaterhouseCoopers as the monitor.

The companies employ about 110 people in Summerside and Bloomfield and will continue to run while under creditor protection.

Last March the provincial government sold its securities in loans to Testori for $5 million to P.E.I. Westside Funding.

That company has since called in the loans.

Testori Americas’ unsecured creditors are owed about $7 million while Wiebel Aerospace has $1.4 million in claims from unsecured creditors.

The two companies owe P.E.I. Westside Funding a further $13.7 million in secured debt.

Of the unsecured creditors, there are 68 claims from creditors located in P.E.I. and include many Island businesses, the City of Summerside, the provincial government, the Canada Revenue Agency and the Atlantic Canada Opportunities Agency.

The creditors located in P.E.I. claim they are owed a total of $1.2 million, the largest of which is Precision Finish, which claims Testori Americas owes it almost $637,000.

There are 31 unsecured claims of less than $1,000.

Wiebel Aerospace’s largest unsecured creditor is the provincial government, followed by the Canada Revenue Agency and the Workers Compensation Board.

Myers said Premier Robert Ghiz created the situation and put jobs at risk by giving away control

when the province sold the debt.

“We think the situation is dire and we think the premier needs to come out and talk about it,” he said.

Innovation Minister Al Roach, who spoke on behalf of the province, said the government isn’t involved and has no control over what’s happening.

He also said the government didn’t know P.E.I. Westside Funding would call in the loans when it sold the debt.

“We had no idea of anything like that,” he said.

Roach said there are still jobs at Testori companies and the creditor protection doesn’t mean the businesses have shut down.

“We did what we thought was the very best for the company and our number one priority then and still is that those people continue to work and the company’s still functioning today even though they’re in CCAA (Companies’ Creditors Arrangement Act) protection.”

 

rross@theguardian.pe.ca

twitter.com/ryanrross

Organizations: Canada Revenue Agency, PricewaterhouseCoopers, Atlantic Canada Opportunities Agency.The

Geographic location: Iceland, Summerside

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Recent comments

  • WILL CONTINUE TO HAPPEN
    January 17, 2014 - 13:38

    Situations like this will continue to happen as the word had probably been out for years that the PEI government is desperate to create jobs and will had out money to bring those jobs to PEI. The Process appears to be, Company comes to PEI, taxpayers money starts to roll in, token workforce hired, Benefits include exempt property taxes, partial wages benefits, etc, Problem arises when Taxpayers money stops rolling in, the company starts rolling out. We see that many times yearly in the paper. Does the Government not keep records of the number of times they have been duped. Government cannot afford nor should get involved with private business. This has been proven many, many times over that the taxpayers always lose. IF any business is worthy of being called a business they should be self supporting and that also includes the local well off businesses that are continually in the pockets of taxpayers while running to the bank with their profits. A business that is not self sustaining regardless if they are backers of the current Government in power or not are not a business, They are a leach on the backs of society.

  • Observer
    January 17, 2014 - 11:17

    Sometimes I wonder if Islanders wouldn't be better off if the government just gave money to residents directly, like some lottery, instead of giving money to companies to create jobs. At least that way the money would stay here and not end up costing way more in the long run.

  • yolanda
    January 17, 2014 - 09:13

    we have either a liar or a fool or both, roll up your sleeves Island taxpayers