Mitchell processor owes millions
Thursday, June 12, 2014
by SUSAN MANN
Great Lakes Specialty Meats of Canada Inc. of Mitchell and the numbered company 2268204 Ontario Inc. collectively owe Farm Credit Canada $5.4 million as of May 23, court documents show.
The 2268204 company also owes the Municipality of West Perth $84,137.30 as of May 7 in taxes that haven’t been paid.
On June 10, Farm Credit Canada applied to the Ontario Superior Court of Justice in London to have PricewaterhouseCoopers Inc. (PwC) appointed as receiver of all of the companies’ assets, undertakings and property. The court granted that request. The companies agreed to the appointment of PwC as the receiver.
Trevor Sutter, spokesman for Farm Credit Canada, says “while the court process is going on we really can’t comment.”
David Schwartz, president of Great Lakes Specialty Meats and 2268204, couldn’t be reached for comment. He’s also the president of two other pork packers that have recently declared bankruptcy – Quality Meat Packers Ltd. and Toronto Abattoirs Limited. All of the businesses were owned by the same person, Schwartz, but Great Lakes Specialty Meats and 2268204 were run as separate companies from Quality and Toronto Abattoirs.
An affidavit sworn May 30 by Ayan Gangopadhyay of Ottawa, senior account manager, special credit, Farm Credit Canada, says “events of default described in the credit agreement and mortgage and security agreements have occurred and” Farm Credit Canada is entitled to appoint a receiver. Farm Credit “believes the appointment of a receiver will enhance the prospect of recovery by FCC and protect all other creditors and stakeholders.”
In an earlier interview, Ontario Pork board chair Amy Cronin says pork farmers have all been paid for the pigs they shipped to Great Lakes Specialty Meats. The company stopped taking pigs June 2 and workers were told to not report for work last week and this week.
FCC provided $6.3 million in financing to 2268204 and Great Lakes Specialty Meats around Oct. 12, 2011 “to assist 2268204 with the purchase of property and to provide working capital to” Great Lakes Specialty Meats, the affidavit says. Great Lakes Specialty Meats leases the property from 2268204 and carries on its slaughterhouse and meat processing business at the property.
The loan to Great Lakes Specialty Meats was guaranteed by Quality Meat Packers Ltd. and Toronto Abattoirs Limited.
Farm Credit sent Great Lakes Specialty Meats and 2268204 a demand for repayment of its loan and a notice of “Intention to Enforce Security” on May 5, the affidavit says.
The companies asked Farm Credit to postpone enforcing its security until 12 p.m. May 23 to allow Great Lakes Specialty Meats additional time to negotiate a deal with Kanematsu Corporation to provide a working capital loan and/or an injection of equity into the company. Farm Credit agreed to the postponement but its conditions for doing so were not acceptable to the companies and specifically Quality Meat Holdings Limited “was not willing to backstop the decrease in GLSM’s (Great Lakes Specialty Meats) collateral,” the affidavit says.
Earlier this week, Ontario Pork chair Amy Cronin noted that Great Lakes had lost its ability to ship product into Russia “because there were some issues that they had and they didn’t renew their license to ship into Russia, and so given that is such a high proportion of what they do at that plant, they needed to stop taking hogs immediately.”
Rachael Burdman, a spokesperson with the Canadian Food Inspection Agency (CFIA) could not confirm whether the agency, which certifies exports to ensure they meet the requirements of destination countries, had revoked Great Lakes’ export license. “To protect the privacy of information,” Burdman wrote in an email on Friday, "CFIA is unable to discuss confidential issues specific to one establishment or operator." BF
– with files from Better Farming staff