Beating a dead pigeon

Thursday, May 14, 2009

© AgMedia Inc.

by BETTER FARMING STAFF

Being out of business is no excuse for failing to register a business opportunity in Illinois.

In February, the state’s security department issued a cease and desist order against the former Pigeon King International Inc. – although folded months earlier in June 2008. The order became final March 20 and became available on the Internet earlier this spring.

“Sometimes bankrupt businesses reopen up again,” says Tanya Solov, a spokesperson with the department. “This way, Pigeon King is on the record.”

The Waterloo-based company sold pigeon breeding pairs for as much as $500 and bought back offspring for up to $50 each. Its collapse left nearly 1,000 breeders in Canada and the United States with thousands of worthless pigeons.

Canadian police forces are investigating. Company’s founder Arlan Galbraith faces personal bankruptcy proceedings this fall.

Illinois is the fourth state to formally bar the business from its boundaries. Iowa initiated action in 2007; Maryland and Washington introduced orders in 2008. In 2008 as well, the company voluntarily ceased operations in South Dakota after discussions with state officials.

According to the Illinois order, PKI violated the state’s 1995 Business Opportunity Sales Law that requires business opportunities to register if a buyer must spend more than $500 and the seller or the seller’s designate promises to buy “any or all products made, produced, fabricated, grown, bred or modified by the purchaser.”

The order requires not only PKI but also its officers, directors, employees, agents, affiliates, successors and assigns to “cease and desist” operations in the state.

Solov admits it’s tough for the state to be proactive in monitoring the compliance of those who have been named along with the company. However, if anyone with a state order against them opened a different business in the state, they would have an “obligation” to tell people “of any disciplinary orders” against them.

Company records show one Illinois breeder, Funk’s Flyers, is owed $203,000.

Solov would not say what tipped the security department’s investigation into PKI because of a rule that requires the department to keep investigations confidential. “Generally, in a case like this cases are opened from a direct complaint, someone who saw or noticed it, a referral or if we happen to spot it,” she says. BF