The resignations ‘constitute a material adverse change in the financial circumstances of the company:’ lawyer
The directors of Broadacre Agriculture have resigned less than three months after a judge approved a plan to keep them on board.
According to court documents, three of the directors quit on June 2 and a fourth on June 3.
Broadacre has been operating under court ordered bankruptcy protection since Nov. 4, 2014. It had been one of Saskatchewan’s largest farming operations with 65,000 acres of owned and leased farmland.
“The monitor believes the fact of the resignation of the board of directors constitutes a material adverse change in the financial circumstances of the company,” Clinton Roberts, senior vice-president of PricewaterhouseCoopers, said in a court document.
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Roberts did not respond to an interview request.
On March 9 the Court of Queen’s Bench of Alberta approved a Key Employee Retention Plan (KERP) for Broadacre.
Chief executive officer Gary Pike, chief operating officer Dallas Pike and chief financial officer Andrew Marshall were granted an extension of their employment agreements through to Aug. 31, 2015.
The three officials were to receive retention bonuses equal to 100 percent of their respective salaries payable in three equal installments between March and August 2015.
Other key employees were to receive a payment of 7.5 percent of their respective salaries earned between Nov. 4, 2014 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,” said Marshall in a Jan. 16, 2015 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.”
Marshall requested a charge up to a maximum of $1.5 million on the property of Broadacre to secure payment for the KERP employees.
The judge approved the plan but granted a charge to a maximum of $1 million on the property.
The court also recently extended the bankruptcy protection to July 31, 2015. The previous stay of proceedings expired on April 30.
According to the monitor, Broadacre and its subsidiary Wigmore Farms Ltd. had 105 claims against them totalling $80.5 million.
As of April 13, the monitor had allowed 89 of those claims worth $33.3 million, was further negotiating 14 claims worth $47.2 million and had disallowed one claim for a small amount.
Broadacre’s inventory of crops as of April 10 was 374 tonnes of old crop, 3,426 tonnes of chickpeas, 2,477 tonnes of durum, 40 tonnes of lentils and 1,800 tonnes of hemp.
Land and equipment has either been sold or is in the process of being sold under various auctions and agreements.
