There are 53 Canadian businesses that will be watching to see how the bankruptcy of Consolidated Growers and Processors Inc. unfolds.
CGP’s United States bankruptcy petition filed in a California court lists more than 500 creditors, farmers and shareholders who had an interest in the company.
In total, the creditors have claims estimated at $10.7 million (U.S.)
There are no secured creditors, such as banks, listed in the documents.
But there are several unsecured creditors who will get priority in any payments the trustee may make from the few assets left by CGP.
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Revenue Canada is listed as a priority creditor, with $100,000 owing in goods and services taxes, and $7,500 in payroll taxes.
The priority payments include $3,184 in unpaid wages to the four Canadian employees dismissed in February, and $4,300 each to company founder and chair Susan Brana and former official Mark Kaeller.
The documents claim Brana’s $100,000 salary and Kaeller’s $60,000 salary went unpaid, but United States law allows for only $4,300 of unpaid wages to be dealt with as a priority.
Farmers unsecured
The group of 232 farmers who grew hemp for CGP in 1999 makes up the largest unsecured creditor. Documents do not break down how much money each farmer is owed, but estimates they are owed $5 million (U.S.)
Included are 74 farmers from the Dauphin, Man., area, 51 from Saskatchewan and seven from Alberta, along with 100 farmers from other parts of Manitoba.
The second-largest unsecured creditor is Brana. Documents show she is claiming $3.5 million for “money loaned and invested into (the) corporation since inception.”
In total, other investors, other former directors, and research associates of CGP have almost $1.3 million in claims.
Los Angeles bankruptcy lawyer Jeffrey Pomerantz said former CGP principals who have claims will have to supply documents proving they loaned the company money.
Added Detroit lawyer Jay Welford: “A trustee’s going to look very hard at that.”
Investors and shareholders in the company have no claim on its assets until all other unsecured creditors are paid in full.
CGP lists the names of 196 shareholders as creditors, 83 of whom are Canadian.
Canadian shareholders include eight farmers, Winnipeg lawyers Tom Kormylo and Jeff Baigrie, First Marathon Securities of Toronto, former employees of the company and all three owners of Winnipeg hemp seller Fresh Hemp Foods.
The bankruptcy documents show several creditors had started court proceedings to collect on CGP’s unpaid bills. One of these creditors is American Express, which is owned $180,000. Eleven law firms are owed a total of $268,000, and a half-dozen utilities, mainly phone companies, are owed $4,400.
The documents list more than 20 European creditors, owed about $54,000.
Canadian creditors other than farmers are owed a total of $226,000, according to CGP’s documents. The largest include:
- Tone Ag Consulting of St. Pierre, Man., $57,000.
- Agrifinance, the company that repossessed a hemp harvester once owed by CGP, $34,543.
- Klagenberg Farms of Selkirk, Man., $14,600.
- Ag Shield Manufacturing of Benito, Man., $13,000.
- The Lombard Hotel in Winnipeg, where CGP held its Christmas party, $5,000.
- R&R Repair of Treherne, Man., $5,000.
