Decision in co-op, contractors case delayed 3 weeks
Majority of creditors say they'll accept 50 cents on the dollar
A financially-troubled housing co-op in downtown Halifax has been given another three-week reprieve from creditors.
North End United Housing Co-op has been embroiled in a fight with contractors who are owed close to $1.1 million for renovations they completed as part of a provincial program. The housing co-op only had $200,000 to pay them.
A judge extended creditor protection in court Monday after the contractors agreed to settle for half the money owed.
Lawyers for the creditors told a judge on Monday that a majority of the business owners are prepared to take a deal that pays them 50 cents on the dollar.
Some of the creditors still object, but Reliable Rooter, Five Star Roofing, Eagle Property Management and Sandmac all say they are willing to accept the co-op's offer.
The creditors had previously asked for 55 cents on the dollar.
"I think we're really lucky to get 50 per cent, because in a lot of cases like this people get nothing," said contractor Bobby Gionet.
The lawyer representing the co-op calls it "late breaking good news."
But the 11th hour deal didn't please the province of Nova Scotia which objected to the extension.The province holds the mortgage on the buildings.
None of the renovations done by the contractors was ever inspected or had a building permit attached to it, according to lawyer Diane Rowe.
'Grasping at straws'
"We want to be sure we know exactly what the liability is before we can possibility entertain the idea of paying out," she said.
Joe McLeod of Reliable Rooter plumbing says Nova Scotia housing is "grasping at straws" to get their buildings back. He says the ordeal has put his company in debt.
"I have well over $100,000 accumulated in debt because of this. if I did receive even a quarter or half, every little bit would help get me back on my feet again. They're just drowning us."
The contractors have been waiting nearly two years to get paid, following a renovation project to fix up the co-op that ran millions of dollars over budget.
The co-op's total debt, including secured creditors such as the Halifax Regional Municipality, the Nova Scotia Housing Development Corporation and the CMHC, is more than $10 million.
The judge says the delay will give the creditors time to have a proper meeting. Work done without building permits will also be inspected.
The co-op and the creditors will be back court Sept. 4.