Farmers doubt they'll recoup costs in Quebec pork producer bankruptcy

Thursday, March 10, 2011

by SUSAN MANN

Farmers who lost money after Quebec pork producer Les Elevages B & F Boulay sought court protection from creditors last year have little hope of recovering what they’re owed.

In December 2010 the company’s bank, National Bank, petitioned it into bankruptcy after it couldn’t make the second of two payments to unsecured creditors. At a meeting earlier last year, unsecured creditors approved the payment arrangement but not all voted in favour of the deal.

Ken O’Farrell says he received what he called a micro-cheque of $580 but he is owed about $20,000 for work he did finishing pigs for the Boulays. He had room to finish 18,000 pigs a year on his farm in Ormstown, Quebec near the New York State border.

As for what happens now, O’Farrell says he found another company to finish pigs for but it took time to work out the new arrangement. “We had no pigs in our buildings for a while until we got going again” and his cash flow dried up for a while.

O’Farrell says he’s not sure farmers can do anything about recovering all of their losses and will just have to “suck it up.”

Documents from the Office of the Superintendent of Bankruptcy list Boulay’s liabilities at $15,969,984 and its assets at $1. But documents filed a year earlier when the company placed its business under the protection of the Bankruptcy and Insolvency Act showed liabilities of $14.3 million and assets of $6.5 million.

Trustee Benoit Fontaine, of Raymond Chabot Inc., couldn’t be reached for comment.

Farmers Claude and Jacinthe Fritsch have been outspoken critics of brothers Francois and Bruno Boulay, who owned the company, and what they see as the brothers’ lavish lifestyle, the bank and the trustee. They say they have been stymied in their attempts to get answers to questions about discrepancies in the numbers. They also question how the bank, a secured creditor, was able to get more than 80 per cent of its losses covered while farmers are getting less than five per cent of the money they’re owed.

Jacinthe Fritsch says 160 farmers, including some from Ontario, are owed about $7 million. But they know there are numbers contained in documents filed as part of the creditor protection arrangement that weren’t correct. For example, Jacinthe says the amount they’re owed was listed at $40,000 but the actual number is $120,000.

O’Farrell also had questions about the numbers. It didn’t seem like a complete audit was done, he says.

Claude Breton, senior director of public affairs at the National Bank, couldn’t be reached for comment. BF