Editor’s note: This story has been altered from the original online version and the print version to acknowledge that some documents have since been redacted.
A judge has approved a plan to retain the executives of a failed large Saskatchewan farm to oversee the sale of its assets.
The Court of Queen’s Bench of Alberta has approved a key employee retention plan (KERP) put forward by the executives of Broadacre Agriculture, a corporate farm that was granted bankruptcy protection Nov. 4.
Broadacre was farming 65,000 acres of Saskatchewan farmland when it went out of business.
Read Also
Volunteers help exotic animal farm rebuild
Exotic animal farm loses beloved camel and pony to huge hail storm that gripped the Brooks, Alta. area as a community member starts a fundraiser to help the family recover from the financial and emotional damage.
Chief executive officer Gary Pike, chief operating officer Dallas Pike and chief financial officer Andrew Marshall have been granted an extension of their employment agreements until Aug. 31.
The three company officials will receive retention bonuses equal to 100 percent of their respective salaries payable in three equal installments between March and August.
Other key employees will receive a payment of 7.5 percent of their respective salaries earned between Nov. 4 and the date of their future termination.
“The current job market in the areas in which Broadacre operates is competitive and robust and I am satisfied that the KERP is necessary to retain the key employees,” Marshall said in a Jan. 16 affidavit submitted to the court. “Without the retention of the key employees, the applicants’ ability to maximize the realization of asset value would be seriously compromised.”
The executive compensation package doesn’t sit well with Allen Blain, who managed Broadacre’s farm near Gravelbourg, Sask., for two years.
“It’s unfortunate that the guys that orchestrated a mess like this can have the audacity to think they’re entitled to a bonus when so many people are going to come up short on it,” he said.
Blain is one of those people. He said he is owed a bonus from the 2013 crop year, when the Gravelbourg operation exceeded Broadacre’s “master crop plan.”
“I wasn’t paid my bonus that was due payable under my contract,” he said.
Marshall requested a charge up to a maximum of $1.5 million on the property of Broadacre to secure payment for the employees.
The judge approved the plan but granted a charge to a maximum of $1 million on the property.
He also approved the sale and transfer of property to Jakki Stephenson, Jason Toews Farms and 10104899 Saskatchewan Ltd., although the details have not been disclosed
Tracy Sandler, the lawyer representing Broadacre, had no comment. The receiver, PricewaterhouseCoopers, was contacted to help explain the sale and transfer and other aspects of the Jan. 22 judgment but did not respond to an interview request.
The judge also ratified an agreement between Broadacre and Ritchie Brothers Auctioneers.
Nearly 300 items will be up for sale in four auctions March 23, April 7, June 22 and July 14.
Equipment to be sold includes 20 Case IH 9320 combines, eight Case IH 4420/4430 sprayers, 11 Bourgault 6700 air seeder carts with 3310 Bourgault drills, 13 Case IH 500 horsepower Quadtrac tractors, a pair of Case IH 450 four wheel drive tractors and four Gulfstream 40 foot travel trailers.
The extensive eight-page list of items also includes combine headers, swathers, small tractors, three-quarter ton pick-up trucks, commodity trailers, augers, conveyors and grain vacuums.
Gary Pike has said all the creditors will be paid in full, but Blain doubts that. The only other major asset he can think of is the firm’s 9,000 acres of owned farmland, which might fetch around $18 million.
When added to the guaranteed $15.6 million from the auction sales, it comes up far short of the $46 million the firm owes to a long list of creditors, which Blain expects will grow in the coming months.
“I can’t imagine the way this has imploded on itself that everybody is going to walk out with what they went into (it with),” he said.
Blain expects there will be a “significant shortfall” once the process is finalized.
Broadacre has been granted an extension on the stay of proceedings to April 30. The original stay expired Dec. 4.
