A downturn in the global economy and the U.S. government’s delays in getting its economic stimulus money into people’s hands are being blamed for the financial problems at Entegrity Wind Systems, says its president and CEO.
Jim Heath said he believes his company, which is teetering on the edge of bankruptcy, can make a comeback if it’s given the chance to restructure its finances by the courts. He said new orders are coming in and the economic stimulus money promised by U.S. President Barack Obama is starting to get into people’s hands.
A P.E.I. Supreme Court justice will rule within days if Entegrity will get a 45-day extension to get its fiscal house in order.
If Justice Wayne Cheverie provides that extension, it will give the Charlottetown-based company some breathing room. If he denies the extension, the company will be deemed bankrupt.
“I can accept responsibility as the CEO, being in the leadership position, I’ll have to take responsibility but I do think we certainly have been hurt significantly by the economy here in the States and also by the legislation that was passed in February that was intended to stimulate our sector,” said Heath.
“People who would normally go find their financing decided to wait on the government financing. It really hasn’t happened yet.”
Entegrity, which builds small wind turbines, owes more than $11 million, according to court documents.
The company disputes those figures, saying it does not owe that much money.
Employees have not been paid since mid-May.
A major player in Entegrity is Malcolm Lodge, a P.E.I. man considered a pioneer in the wind energy business.
Lodge used to be president of Entegrity. He’s still a shareholder.
Lodge has not agreed to interview requests, but in court documents obtained by The Guardian Lodge reveals some of the problems at Entegrity, problems that go much deeper than the downturn in the economy.
In a sworn affidavit, Lodge said he often found Heath to be “difficult and confrontational.” He indicated that both men, principles in the company, had very different ideas about how the company should be operated.
Lodge was president of the company up until late August 2008. Heath then replaced him.
Still, Lodge owns about 11 per cent of the shares.
“(Heath) can also be very disagreeable in terms of discussing my ideas for running the company,” Lodge says in his affidavit.
“Mr. Heath and I were diametrically opposed in terms of how we should operate the company and what steps should be taken to best ensure the company’s success.”
Heath, who is based in Santa Fe, New Mexico, would not discuss Lodge’s involvement in the company past, present or future.
There are also questions about Entegrity’s future in Prince Edward Island.
In a sworn affidavit, John Gundy, vice-president of commercial lending with Mercantile Finance, Entegrity’s bank, said he was told by Heath that he was sourcing up to $10-million in new equity, and that it was “…his plan to move the entirety of (Entegrity’s) operations to the United States.”
But in an interview Monday, Heath said he planned to maintain his P.E.I. facilities.
“We have some excellent people there, and we have people with excellent experience, who know the equipment very well,” said Heath.
“It would only make sense for us to continue activity there.”