Hopes rise for potential sale of shuttered ServiCom call centre

While more than 600 employees at the call centre in Sydney, N.S., grapple with the sudden loss of their jobs, the former director of operations is optimistic about a new buyer and potential deal that could see it reopen.

Former operations manager says Iowa businessman very close to inking deal to buy operation

Todd Riley, the former director of operations at the ServiCom call centre in Sydney, N.S., speaks with former employees on Monday at a local legion. (Norma Jean MacPhee/CBC)

While more than 600 employees at the ServiCom call centre in Sydney, N.S., grapple with the sudden loss of their jobs last week, the former director of operations is optimistic about a new buyer.

Todd Riley said he had many conversations throughout the weekend with a serious American buyer, a potential deal that could lead to the operation reopening.

"The lawyers are just dotting the Is and crossing the Ts," said Riley. "This gentleman is ready to purchase the business. The big thing is getting the approval from the courts. I don't foresee an issue."

Servicom's parent company, JNET Communications, filed for bankruptcy protection in the United States on Oct. 20. Two of its Illinois call centres had been closed a month earlier.

But employees in Sydney were stunned last Thursday when their call centre, which had operated in the area for nearly 20 years, was abruptly closed, a move that came just three weeks before Christmas.

Riley has not named the potential buyer for the Sydney centre, except to say that he's based in Iowa, and a final decision is close.

"He has the cash to do this deal and we're looking to do this now," he said.

Former ServiCom employees were briefed on the potential sale at the meeting. (Norma Jean MacPhee/CBC)

A business professor at Cape Breton University said the Sydney operation has lots to offer financially. 

"It looks positive for a new owner," said George Karaphillis, dean of the Shannon School of Business.

Karaphillis looked at the bankruptcy reports filed in Connecticut for Servicom, and said the Sydney centre had "very respectable" financial numbers.

Nova Scotia Business Minister Geoff MacLellan is also optimistic the sale of the Sydney call centre will go through, calling it the most successful of the entities under JNET Communications.

He said the other businesses that weren't as profitable were pulling down the entire corporate structure. 

"They would take the success that was happening here, pull those profits into the States and put it toward operational losses," said MacLellan. "Eventually, that led to the bankruptcy."

Business Minister Geoff MacLellan. (CBC)

He said the American buyer nearly purchased Servicom early last week but the deal fell through, forcing its closure on Dec. 6.

"It became a reality that they would have to take on a lot of the liabilities to make the sale immediately," said MacLellan. "And because they weren't willing to do that, and rightly so, they had to regroup and look at a different way that they would acquire the local assets."

MacLellan said once the JNET Communications assets have been dealt with by the courts, the new buyer can incorporate and reopen the centre. He confirmed the new potential buyer is not interested in obtaining any government funding for the purchase.

MacLellan said he and federal MP Mark Eyking are doing what they can to fast-track the deal. 

"This is a private-sector business model that quite frankly works and is profitable, and we need those people back to work," said MacLellan.

Employees optimistic

Riley met Monday with former Servicom employees to update them on the potential sale. 

Jenna Cluett, who worked with ServiCom for nearly three years, said she has felt "confused and in the dark," but she was cautiously optimistic about a potential buyer. 

"It's great to hear positive words for a change. I'm just trying to look up, you know, just think of the most positive of it all. I have good faith in them to take care of things," she said. "I think everything will go well and we'll be back to work in no time."

A co-worker, Matthew Collier, said he hasn't been paid for any work since the week of Nov. 10. Monday's update was positive, he said.

"That's a long time of no pay, all the bills piling up," he said. "It gives you hope."

Still unpaid for weeks of work

In the meantime, support continues to pour in for the former employees. From benefit dances to free haircuts, many Cape Breton businesses and individuals are offering assistance. 

Riley said he's also trying to ensure that employees get pay they're owed and their records of employment.

Scott MacDougall said he's been happy with Riley's efforts to communicate with his former staff, including reaching out personally to many of them. 

"I put 100 per cent faith in Todd bending over backwards to do this for people, he's been at it a long time. So people need this reassurance. "

About the Author

Norma Jean MacPhee

Reporter

From people around the corner to those around the world, Norma Jean MacPhee has more than a decade of experience telling their stories on the radio, TV and online. Reach Norma Jean at norma.jean.macphee@cbc.ca