Blue Wave Seafoods failure puts taxpayers on the hook
Fish plant filed for bankruptcy after $500K loan
Nova Scotia taxpayers will have to wait a little longer to find out how many millions of dollars they'll lose in the failure of Blue Wave Seafoods, a fish processing company that folded in the fall.
Company creditors met on Thursday to consider a restructuring plan that could see taxpayers recover as little as three cents on the dollar. The provincial government requested and was granted an adjournment.
The meeting has now been rescheduled for March 24.
Blue Wave Seafoods went under in the fall, owing its biggest creditor — Nova Scotia Business Inc. — $3 million. The fish plant filed for bankruptcy shortly after receiving a $500,000 loan delivered on the eve of the 2013 provincial election.
The then-governing New Democratic Party justified it as a way preserve 70 jobs at the Port Mouton plant.
Halifax fish broker Bluenose Seafoods said it can revive the operation, but at a cost to taxpayers. It's offering the provincial lending agency three cents on the dollar in cash — which equals $100,000 — or five cents over over five years.
Nova Scotia Business Inc. would not comment to CBC News on the proposal, but noted "the unsolicited offer, made through the trustee, is 20 times less" than what's owed.
46 unsecured creditors
"NSBI has a responsibility to recover an acceptable amount based on the appraised value of the security, and the value of the loans due to us," said spokesman Shawn Hirtle.
The Opposition leader has doubts about the offer.
"I believe as a creditor the government has a duty to recover the maximum amount of taxpayers money and I'm not satisfied they've done that yet," said Progressive Conservative Leader Jamie Baillie.
The Atlantic Canada Opportunities Agency and other federal agencies have also sunk money into the company, which is affiliated with the D'eon Group based in Pubnico.
There are 46 unsecured creditors owed a total of $900,000. The largest, Richard 'Bee' d'Entremont’s Acadian Fish Products, is owed $426,000.
Next is Bridgewater trucking company W.R. Bolivar Transport, which is owed $118,000, and Tech Park Canada Inc., which is owed nearly $100,000.
Unsecured creditors would see see between 10 and 25 cents on the dollar if the deal is accepted.
The receiver, Deloitte, calls it the best deal. The alternative is bankruptcy and that would leave dozens of unsecured creditors with nothing.