By DAVE PINK
In the two years leading up to the bankruptcy of Pigeon King International, its owner, Arlan Galbraith, withdrew a total of $870,321 from the company’s bank accounts, it was revealed in Kitchener Superior Court on Thursday.
Galbraith is charged with defrauding the investors in the business of millions of dollars. He has chosen not to hire a lawyer and is representing himself.
Pigeon King was in the business of selling breeding pairs of pigeons to growers, and buying back the offspring at a set price.
Documents presented by Susan Taves, a partner with BDO Dunwoody, the financial services firm that oversaw the Pigeon King bankruptcy, showed that on three occasions beginning in 2006, Galbraith – the sole owner of the company -- took shareholder allowances totalling $818,031, and paid himself a salary of $52,290.
During his cross examination of Taves, Galbraith said he made those payments to himself after Pigeon King was re-structured from a sole proprietorship company to a corporation. Those funds, he indicated, were his own private assets that during the changeover were assigned to the corporation. Galbraith, in the form of a question to Taves, said he believed he had a right to reclaim that money.
Taves did not contradict him.
Galbraith maintains that the money was re-invested into the company, and that the millions of dollars collected from new investors was used to pay previous investors for the birds they had delivered to him.
Documents also showed that in 2008, about $2.4 million was transferred from Pigeon King to another company owned by Galbraith, Sacred Dove Ranch. But Galbraith, during his cross examination, said that Sacred Dove Ranch was a holding company and that money was routinely transferred to and from Pigeon King as it was needed – a claim that was not disputed by Taves.
Galbraith made it known to the court that even though Pigeon King went bankrupt in mid-2008 that he had not yet declared personal bankruptcy. Crown attorney Anita Etheridge told the court Galbraith’s personal bankruptcy came on Nov. 3, 2008, although Galbraith said in court that the personal bankruptcy came later.
As well, Galbraith is facing four charges under the Bankruptcy and Insolvency Act – that he obtained money under false pretences, that he failed to surrender his credit cards after his bankruptcy, that he used his credit cards after his personal bankruptcy and that he failed to attend a meeting of his creditors after the bankruptcy.
Maxine Siwinski, an investigation analyst with the Royal Bank of Canada, told the court that the bank’s records show that Galbraith used his credit card to take money from an automated teller on five occasions after Nov. 3, 2008 and later cashed a cheque attached to that credit card account.
During Galbraith’s cross examination of Taves, he admitted that he had gone through another bankruptcy before Pigeon King. He asked Taves if there was an indication that he had not complied fully with the rules of that previous bankruptcy. She said there was not. BF
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