Plasco obtains creditor protection, 80 jobs terminated
News comes more than a month after company missed 3rd financing deadline
About 80 jobs at Plasco have been terminated after the company obtained a court order to protect itself from creditors following several missed deadlines to secure financing for a waste-to-energy plant.
The employees will receive one month of severance pay, a spokesperson for the company said.
The company announced Tuesday that it secured the order under the Companies' Creditors Arrangement Act after it failed to pay a $3.5 million bill earlier this month.
"Plasco is a pre-revenue, development-stage technology company that requires additional time and funding to refine and commercialize its waste conversion technology," the statement reads.
Houlihan Lokey Capital Inc. has been hired to help Plasco find potential buyers or investors.
In the meantime, Plasco management will continue day-to-day operations of the company. Plasco has hired Randall Benson, of KPMG, as chief restructuring officer.
In 2012, the city signed a 20-year, $180-million contract with Plasco to divert residential waste from landfills and instead use it to produce electricity.
Plasco has missed three deadlines to secure financing, the most recent of which passed on Dec. 31, 2014.
Days later, the city put out a call for other waste companies capable of handling household garbage.
A staff report on whether or not to sever ties with Plasco in favour of searching for another waste company was released later Tuesday but Mayor Jim Watson said ahead of the release that "for all intents and purposes," the city's relationship with Plasco is over.
"The staff report that you'll see later today, the recommendation was to cease our relationship with them and move forward with an RFI (request for information) or an RFQ (request for qualifications)," he said.