Large unsecured creditors could get about 15 to 20 per cent of their claims' dollar value over several years
© Photo special to The Guardian
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.
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.”