PKI incorporation emerges as key issue
Thursday, December 4, 2008
© Copyright AgMedia Inc
by BETTER FARMING STAFF
On Wednesday, in an Ontario Superior Court of Justice in Bankruptcy and Insolvency, Arlan Galbraith’s lawyer filed his client’s intention to dispute an application to declare him bankrupt. Galbraith is the founder of Pigeon King International, Inc., a Waterloo, Ontario-based pigeon breeding company. When the company folded earlier this year, hundreds of contracted pigeon breeders in Canada and the United States were left with worthless birds.
James Wiersma, of Fishersville, Ontario, one of four creditor-appointed inspectors in the PKI bankruptcy, claims Galbraith personally owes him nearly $23,000 under the terms of a pigeon-breeding contract. He alleges others are owed much more.
Galbraith is not only asking the court to dismiss Wiersma’s application, but also to repeal the Nov. 12 appointment of BDO Dunwoody as interim receiver. BDO is also PKI’s bankruptcy trustee.
He’s claiming that he’s been able to pay his debts and doesn’t owe Wiersma anything, or if he does, it’s under $1,000. He claims it’s another company that owes the money and alleges Wiersma is using “this court as a collection agency.”
All claims have yet to be proven in court.
Documentation surrounding Galbraith’s 2007 incorporation of PKI may become a key issue, suggests correspondence between the parties’ lawyers.
On Nov. 28, Waterloo lawyer Steven Gadbois, who represents Galbraith, asked BDO’s lawyer, Frank Highley, for all records of personal transactions Galbraith might have had with contract breeders. Gadbois also requested documents related to the incorporation of PKI.
“We do not recall any files related to the incorporation of Pigeon King from the sole proprietorship,” was Highley’s same-day response. “The Trustee seized a variety of other records being primarily banking records.”
BDO spokesperson Susan Taves, confirms that when the company became PKI’s bankruptcy trustee last summer, they seized nearly all office records. “We have about 50 boxes of records,” ranging from financial and breeder documents to corporate correspondence and marketing materials, she says.
On top of that, Galbraith voluntarily provided other records, including records previous to PKI’s incorporation.
Yet, when reviewing these, Taves doesn’t recall seeing much documentation about how Galbraith publicized his business’ incorporation.
“The fundamental question here (that Galbraith’s lawyer is trying to find out) is what did he do at the time when he incorporated?” she says. “And I’m not sure we saw anything specific to that.”
In the meantime, BDO remains Galbraith’s interim, court-appointed receiver to protect assets until a decision about bankruptcy is made.
Among these may be proceeds from the recent sale of Galbraith’s Waterloo home that were seized by the Canada Revenue Agency. Taves says BDO has contacted the agency, which is now seeking legal advice.
On Dec. 9, lawyers representing both sides plan to ask the judge for a special appointment hearing. That hearing likely won’t take place until the new year.
In its heyday, PKI sold pigeon breeding pairs for as much as $500 and bought back offspring for up to $50 each. BF