Nova Scotia

Nova Star seizure ordered by U.S. Federal Court due to unpaid bills

CBC News has obtained court documents that show the U.S. Federal Court has ordered the seizure of the Nova Star ferry following complaints from a company that says it is owed close to $200,000 for pilot fees.

Nova Star Cruises says it has paid 'most of its supplier costs' and plans to pay the rest

A U.S. Federal Court in Portland has ordered the seizure of the Nova Star ferry following complaints from a company that says it is owed close to $200,000 for pilot fees. (Angela MacIvor/CBC)

A U.S. federal court has ordered the seizure of the Nova Star ferry following complaints from a company that says it is owed close to $200,000, court documents show. 

CBC News has obtained the U.S. District Court order to the U.S. Marshals Service to take possession of the ship operated by Nova Star Cruises.

The ferry provided daily passenger service across the Gulf of Maine between Yarmouth, N.S., and Portland, Maine, from June until mid-October.

The "Warrant for the Arrest of the Vessel" ordered the seizure of the MV Nova Star, "her engines, boilers, tackle, appurtenances, electronics, or other property." 

It says an individual or corporation has 14 days to make a claim to the seized property. A copy of the document, which was provided to CBC News by the Portland Press Herald, is dated Oct. 30 in Portland. 

61 trips since August

A spokesperson for Nova Star Cruises said the company will not be doing interviews, but a short statement was issued.

"Nova Star Cruises has paid most of its supplier costs. We plan to pay all our suppliers as we have done over the past two seasons," the statement said.  

A company that provides pilot services to the ferry, Portland Pilots, told the court it hadn't been paid since Aug. 17 and showed invoices totalling $195,898 US. 

The court documents say Nova Star Cruises paid pilots $3,198 for each transit until Aug. 16 but not for 61 trips after that. 

The news comes just days after the provincial government announced it is in negotiations with Bay Ferries to run the ferry service next year.

Nova Scotia's minister of transportation says he found out about the seizure through the media.

"With last week's announcement, the province effectively ended its relationship with Nova Star‎. We fulfilled our $13-million financial commitment to Nova Star‎ Cruises and are now working to get an agreement in place with Bay Ferries, the new operator," Geoff MacLellan said in a statement. 

Losing hope of payment

Mark Usinger, president of AL Griffin Inc. in South Portland, supplied equipment for the ship and says he hasn't been paid at all this season.

He says the family-run business is owed almost $13,000 for work that included providing sheets of steel and parts to repair shower facilities on the ship.  

"We've never stiffed any of our suppliers one penny. What it does is it hurts our ability to make other purchases and it hurts our personal finances because we have to move money around from personal finances to cover things when there's shortfalls," he said.

​The Nova Star made its last sailing of this season on Oct. 14.

The court documents say the Nova Star is expected to leave Portland within a few days.

The beleaguered Nova Star Cruises has received a total of $41.5 million from the Nova Scotia government. It hit the $13-million subsidy cap earlier this year and received the remaining $1.9 million promised by the Nova Scotia government to pay its operating bills after sailings finished. 

Passenger service didn't meet goals

Usinger says he stopped providing services to the company at the end of the summer because it hadn't paid its bill but with this weekend's reports of creditors owed thousands, he told CBC News he is losing hope he ever will receive the money. 

"Down here they keep saying, well everybody is going to be paid in full. The money came from the Canadian government, that last payment, and not a penny has gone out to anyone that I've heard of."

The Nova Star ferry missed its passenger goals both years it's been in service. The number of passengers this year fell to 51,038, down from its inaugural year in 2014 when 59,018 passengers used the ferry.

Kevin Lacey, director of the Atlantic Chapter of the Canadian Taxpayers Federation, says the move to actually seize such a sizable asset is a bad sign.

"It speaks volumes about the financial health of the operator and also the health of the service generally. After all the millions of dollars we've put into the ferry," he said. 

"If $13 million this year to this ferry service couldn't keep it out of financial trouble how much money is it going to cost us next year to keep the boat in the water and keep it operating?"

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