CHARLOTTETOWN, P.E.I. - As a business owner that is owed $26,082 from Diversified Metal Engineering (DME), Peter Metaxas isn’t optimistic about the chances he’ll get any of that amount back.
“Zero,” said Metaxas on Wednesday, the owner of SEC Heat Exchangers in Belfast.
Metaxas said the amount owed was for equipment sold to DME for its Charlottetown facility.
SEC Heat Exchangers has been doing business with DME for at least 15 years.
The business was on a list of unsecured creditors owed money by DME, which has been in receivership since Nov. 26.
Metaxas said he isn’t optimistic about recovering what he’s owed because he’s been through similar situations before and hasn’t had any success.
The Royal Bank of Canada is the secured creditor and is owed $18.1 million while the unsecured creditors are owed $27 million. Several entries on the list also indicate the amount owed as “to be determined.”
“So, the first $18 million, or parts of it, will go to the bank. Do you think (the receiver) will be able to liquidate the assets of DME and get more than $18 million? Not in a fire sale.”
Metaxas also said the business will overcome the loss, but it won’t be easy.
“We have to work just short of two weeks to break even for just the costs on what we lost on that DME job, never mind the profit – what it cost us to sell them those heat exchangers,” he said, adding that the business will be basically “working for nothing” to make up the loss while still paying salaries and business expenses, such as heating the building.
The list of unsecured creditors was recently released by the receiver, Alvarez and Marsal. It includes around 50 P.E.I. businesses and organizations and 141 individuals. The list also includes the provincial treasurer/minister of finance and municipal affairs ($19,525) for property taxes, Maritime Electric ($6,043) and Finance P.E.I. ($1,438) for land rental on a parcel of land beside their facility that is used to store fabricated equipment. As well, a spokesperson for the province said $4,945 is on the list for boiler and pressure inspections.
The overall number of unsecured creditors in Canada and the U.S. is about 760 in the receivership of DME Limited Partnership, DME General Partnership Inc., Atlantic Systems Manufacturing (2016) Ltd., DME Canada Acquisitions Inc. and DME US Holdco Inc. (collectively DME).
The application to appoint a receiver was made by RBC after DME defaulted on its loan payments.
The receivers have set a deadline of Jan. 7 to receive bids to acquire the business or its assets. The estimated value of DME’s assets is $71.7 million.
Besides Charlottetown, the company has offices or facilities in B.C., Toronto and related operations in the U.S.
At a glance
Some of the approximately 50 P.E.I. businesses or organizations (with the amounts in brackets) that are owed money by DME.
McLoughlan Supplies (P.E.I.) Ltd. ($212,026)
Mohr Technical Services Inc. ($41,642)
Quinn’s Marine and Machine Shop ($37,977)
Beaton’s Wholesale Dry Goods Ltd. ($29,022)
Williams Murphy & MacLeod ($14,559)