A local company that received millions of dollars in funding from the federal government in 2009 entered into receivership this spring for reasons yet unclear, leaving a lineup of creditors waiting to be paid back.
Since then, local residents have been wondering what happened to both the company, Golden Timber Frames Limited, and the funding, but details have been hard to find.
Invermere’s Shirley Campbell is one of those residents. She said that it is unfortunate that Golden Timber Frames is no longer operating, and that she has been stumped when looking into what happened to the grant money.
“That is taxpayers’ money,” said Ms. Campbell. “It shouldn’t be this difficult to access information about the outcome of these grants. Tracking the funding is difficult, and I haven’t been able to find out any information on my own, which is why I came to the paper.”
Golden Timber Frames Limited was created to manufacture a wide range of timber frames and timber components for residential and commercial use. The manufacturing facility was constructed on Hwy 93/95, just north of Invermere on Shuswap Indian Band land.
The organization received multiple grants from multiple funding agencies, the most notable being a near $1.5 million grant from Western Economic Diversification through the Community Adjustment Fund, a Federal program to stimulate the economy in rural areas.
“I sat on the management board for the Southern Interior Development Initiative Trust that also provided them with a significant amount of money as well. They got the money, built the facility and they were moving forward,” said newly-elected Kootenay-Columbia MP, David Wilks.
The money was to be used to help Golden Timber Frames introduce new manufacturing technology, enhance production and diversify its customer base by marketing to builders across North America.
But in an unexpected twist, Golden Timber Frames Ltd. filed for bankruptcy and entered receivership this spring. Mr. Wilks’ understanding of the situation is that the company had a problem with one of its lenders.
“It had nothing to do with the federal government. It had something to do with the land, but I don’t know exactly,” he said.
Now that the company has entered receivership, some of the grants might be returned if the agencies that provided the funds are on the creditor list, Mr. Wilks said.
“Basically if it is a grant it was provided to that company, they exercised their money in good faith and they did put a product forward and, like any other grant, it has no strings to it,” he said. “There is a pecking order where people get their money back when they sell the assets.”
According to a court document obtained by The Pioneer, the Supreme Court of Canada appointed Vancouver-based Wolrige Mahon Limited to be the receiver of both Golden Timber Frames Ltd. and Golden Timber Frames Partnership. They now have the custodial responsibility for the companies, including tangible and intangible assets and rights.
The total assets come in at approximately $2,906,000, the court document states, including accounts receivable, inventory and the property plant and equipment.
The list of secured creditors, those first in line for repayment, includes Business Development Bank of Canada for almost $2 million, Southern Interior Development Initiative Trust for just over $600,000 and the Bank of Montreal. The list of unsecured creditors, those who should receive a share of any leftover money after secured creditors are paid, includes 53 agencies or companies, for a total amount of nearly $600,000.
The largest amount sought by an unsecured creditor, Western Economic Diversification Canada (WEDC), is a little less than $400,000, only a fraction of the nearly $1.5 million granted back in September of 2009.
The difference between the amount sought and granted is because a full grant was never administered, as funds are distributed when needed, not in a lump sum, said WEDC spokesperson, Ben Letts.
“We can confirm that Western Economic Diversification had reimbursed Golden Timber Frames Ltd.
$396,479 for eligible costs that they incurred prior to the business going into receivership,” Mr. Letts said. “Businesses that go into receivership are in default of their contribution agreement with Western Economic Diversification and are expected to repay the funds they have received. As the process is ongoing, it would be premature to speculate on whether or not these funds are recoverable.”
Senior Associate of Insolvency and Restructuring with Wolrige Mahon Ltd, Raj Hara said that the assets of both Golden Timber Frames Ltd. and Golden Timber Frames Limited Partnership are currently for sale, and they expect offers to come in until the end of May.
“We have 24-hour security on site to ensure the security of the assets and we’re just doing everything feasible to get the best value for the assets. We’re just waiting to get some offers,” Mr. Hara said.
Once the assets are sold, the money will be used to pay back the creditors. The Pioneer was unable to contact representatives for Golden Timber Frames, and Dean Martin, CEO for Kinbasket Development Corporation, said he would rather not speak about the situation until the court process is complete.