P.E.I. wind company loses court protection
Last Updated: Friday, October 16, 2009 | 10:43 PM AT
CBC News
The Supreme Court of P.E.I. has denied a request by Entegrity Wind Systems for an extension to devise a plan to avoid bankruptcy.
The wind turbine manufacturer owes approximately $10 million to creditors and has been trying to put together a business plan to prove it can turn the company around. It has been under court protection from creditors since August.
The company has been insolvent since mid-July, after accumulating losses of $12.8 million since the fall of 2004.
The company asked the court for another 36 days to develop a plan. Entegrity lawyers said the company was talking to some potential investors and some potential buyers for turbines.
Supreme Court Justice Wayne Cheverie refused to grant any further extensions and described the company's efforts to find new investment as "pure fluff." He also said the company had not acted in good faith, nor with due diligence.
Entegrity was also recently denied a $350,000 loan from the province.
The main creditor, Mercantile Lending Company of Toronto, argued the longer bankruptcy is delayed, the harder it will be on the company's reputation and to find employees willing to work there. Cheverie agreed.
Mercantile is owed approximately $3 million. Other creditors and suppliers are owed about $7 million, but they are unsecured and it is not clear if they will be able to recover their money.
Kevin Kiley, a lawyer for Mercantile, said a receiver will take possession of the assets and determine the company's financial state of affairs.
Malcolm Lodge, the founder of Entegrity and a wind energy pioneer in P.E.I., declined an interview on Friday but said he felt the company could be restructured and turned into a viable business.
