First the Wilcox Co-op Association filed a builder’s lien against a new ConAgra elevator at Corinne, Sask., for an unpaid fuel bill.
Then ConAgra applied to have all liens removed.
Now the co-op finds itself a defendant in a lawsuit between Con-Agra and its general contractor, Universal Grain Systems.
It began innocently.
A multinational grain company decided to build an elevator in a small rural community. An experienced general contractor built the facility, hired local tradespeople and bought services and materials within the area.
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It sounded like the kind of win-win situation rural communities hope for when big business comes to town. But when ConAgra and its contractor, Universal Grain Systems, began to duel over the paperwork, it was anything but a win for the small-town suppliers. The elevator was built, but many remain unpaid.
ConAgra is suing its general contractor, and because of a recent application by ConAgra to have the builder’s liens lapse against the elevator, Universal is counter-suing.
A lawyer for Universal said the intent is not to sue small creditors owed money for construction. But, under the law, their liens have given them a claim against the new elevator.
Wilcox’s small farmer-owned co-op is at the bottom of a list of 26 companies and individuals that didn’t receive their money for helping build the now-open ConAgra elevator at Corinne, Sask.
The $3,000 owed to the co-op for fuel doesn’t sound like much, but when costs for legal advice and interest on the low margin debit are added to the bill, the co-op fears it may end up losing money just for selling fuel to the companies.
“It’s bad enough we don’t get paid for our fuel but now these guys want to sue us for it as well,” said a member of the co-op’s board of directors.
Many creditors choose to remain silent or will speak only off the record about the problem, not wishing to damage future business prospects with ConAgra.
Last month the grain company applied for credit with the co-op. The board turned down ConAgra’s credit application.
The suit filed by Universal calls for the sale of the Corinne facility and asks that ConAgra pay Universal $1.679 million in damages from the project’s holdback account.
Over $2.5 million in unpaid bills are attached to the lien against the elevator. Universal is asking the Court of Queen’s Bench in Regina to hear the case.
ConAgra is now attempting to have its suit against Universal, for general damages and breach of contract before the Manitoba Court of Queen’s Bench, heard in a Saskatchewan court. That hearing will take place July 6.
