Municipality cancels $500k in unpaid taxes
The Cape Breton municipality of Richmond has been forced to write off nearly $500,000 in unpaid taxes from a bankrupt company.
Federal Gypsum, based in Point Tupper, N.S., shut down in June 2008 and filed for bankruptcy a month later, owing a number of creditors a total of $32 million.
The county has filed a claim under bankruptcy proceedings, says chief administrative officer Warren Olsen.
"Like other creditors we were hopeful if there is anything to be split from any assets or any cash that they had, that the county would be considered a secure creditor," he said.
But Olsen said he is not optimistic the county will see any of the money.
With a total operating budget of about $12 million, he said the loss of nearly half a million is a big hit. Olsen said the county has had to streamline a number of services in the past few years to make up for the lost revenue.
Federal Gypsum blamed rising energy costs and the housing crisis in the United States for its financial problems at the time it closed. It was the third company that tried to turn a profit at the plant, which manufactured wallboard.