‘Business as usual’ at building company’s Ontario dealership

by SUSAN MANN

It’s business as usual for the Ontario dealer of a Saskatchewan-based company that sought bankruptcy protection last week.

Ben Hogervorst, general manager of Cover-All Buildings of Ontario, says the Ontario’s business 15 employees remain on the job despite the March 24 Court of Queen’s Bench of Alberta decision to grant Cover-All Building Systems Inc. protection from creditors.

Court documents show Cover-All Building Systems, which is headquartered in Saskatoon, blames its financial woes on the global recession and growing concerns about the safety of one of its building lines. During the time it’s in court protection, the company plans to restructure its business. Ernst & Young Inc. is the court appointed monitor.

There are about 2,000 Cover-All buildings in Ontario. Most are used in agriculture, while some are in the commercial and industrial sectors.  Hogervorst says the warranty and servicing of the buildings still has to be determined. “We’ve not been given any direction to change policy or anything.”

A prepared email statement supplied by the main company’s spokesperson Jenifer Sarver says Cover-All’s goal “is to emerge from the restructuring and resume operations as a leading building manufacturer as soon as possible.”

Cover-All president and CEO Nathan Stobbe says in a March 24 affidavit the “worldwide economic downturn negatively impacted almost every market the Cover-All Group operates in.” The recession weakened the company and “ultimately left it unable to deal with any further economic shocks.”

Concerns that its Titan building line may be susceptible to collapse under heavy snow or strong winds exacerbated the company’s financial struggles. Cover-All notified customers earlier this month about the concerns and suspended production and sale of all building models until it completes engineering reviews.

Susan Baker, manager of insurance services for the Ontario Mutual Insurance Association, says they’re aware of the company’s safety notice. The association hasn’t had a chance yet to do its own research. She says she hasn’t heard of any buildings collapsing in Ontario.

Hogervorst says he understands Cover-All has stopped production for a couple of weeks. “We have buildings that were in stock and were slated to be built. We’re carrying on normal business.”

Hogervorst notes they’re expecting Cover-All to emerge from restructuring “likely stronger than ever.”

The company is being sued in certain jurisdictions in the U.S., Canada and Europe, Stobbe says in the affidavit.

Hogervorst says anyone with concerns about the Titan buildings should contact the manufacturer directly in Saskatoon. There are some Titans in Ontario.

Have there been any problems with the buildings in Ontario? Hogervorst says no.

Bryan Law, president of the Canadian Farm Builders Association, says the only problems he’s heard about the buildings in Ontario “is some of the covers deteriorate quicker than normal.”

Sue Carroll, spokesperson for the Ontario Ministry of Consumer Services, says they haven’t received any complaints but “if people are complaining they could be going right to the company itself.”

Stobbe notes the company couldn’t find an out-of-court solution to its financial difficulties and there wasn’t a reasonable expectation its financial condition will improve.

Cover-All in Saskatoon laid off most of its 483 staffers on March 25. Stobbe says in the affidavit Cover-All is only keeping staff essential to maintain the value of the business and to restructure. There were 400 staffers located in Saskatoon while the rest were in Ontario, Manitoba, Alberta, the United States and Germany.

Cover-All designed and manufactured 12 different building models ranging from five to 300 feet wide and any length. They are made from polyethylene fabric stretch over a steel frame.

About 35,000 of its buildings are located around the world. They are used in agriculture for livestock and storage and in other economic sectors, such as retail stores, factories, warehouses, distribution centres, banks, offices and for schools, religious, athletic and entertainment events.

Founded in 1993, the company concentrated on the agricultural market initially and then expanded into the commercial and industrial sectors in 1998. Stobbe says in the affidavit Cover-All was the largest supplier of pre-engineered membrane building systems in North America with an estimated market share of 25 per cent.  In 2008, revenues reached about $129 million.

Cover-All’s unaudited financial statements show the company’s assets at $141.1 million. It owes $96 million, including $3.3 million to its bank, CIBC. BF