A group of Saskatchewan investors is planning legal action against an Alberta hog barn promoter.
About 75 farmers and businesspeople in the Portreeve, Sask., area allege they lost $430,000 to a company called Pure Lean Hogs (Portreeve) Inc.
The money was raised in 2001 to explore the feasibility of building a 600-sow hog barn in the Portreeve area in conjunction with Pure Lean Inc., an Alberta hog production company that specializes in environmentally friendly feeder and compost fertilizer systems.
Two years later, investors wonder what happened to their money.
Read Also
Saskatchewan RM declines feedlot application, cites bylaws
Already facing some community pushback, a proposed 2,000-head cattle feedlot south of Swift Current, Sask., has been rejected for a municipal permit, partly over zoning concerns about the minimum distance from a residence.
“A sign went up that said this facility was going to be built. Basically that was it,” said Gordon Stueck, a pharmacist from Leader, Sask., who invested $5,000 in the project.
“What we want is the books opened up to find just exactly where this money has gone, why it went there and where we stand.”
Stueck is the spokesperson for about half of the original investors, who have hired a lawyer to get their money back. To date no statement of claim has been filed against Pure Lean Inc.
Pure Lean Inc. director Howard Bolinger said the investors are barking up the wrong tree if they go after his company.
Bolinger and his business partner, David Den Hollander, took over majority control of the publicly traded entity in May 2003, but didn’t buy the five associated companies, including Pure Lean Hogs (Portreeve) Inc.
“We have absolutely no association and nothing to do with these other companies,” Bolinger said.
There’s nothing stopping the investors from suing Pure Lean Inc., he said, but it would be like trying to get blood out of a stone.
According to the most recent financial statement, the company lost $561,378 in the year ended February 2003, which added to the previous year’s $608,747 deficit. And things have only gotten worse.
“Since we’ve been involved it’s been a bloodbath,” Bolinger said.
“We’ve lost probably $300,000 due to market conditions.”
Todd Boschee, a former director of Pure Lean Inc. and Pure Lean Hogs (Portreeve) Inc., didn’t have much to say about the potential lawsuit.
“I wouldn’t even want to comment because I don’t know the particulars or anything on that.”
Another former director, Bob Notenbomer, had not returned calls from the Western Producer by press time on Jan. 9, but in December he told CBC radio that investors were told it would take $1 million to build a barn. However, they only raised $430,000.
He said the money was spent on water testing, buying land and acquiring permits to operate the facility. Notenbomer said investors were kept informed about the costs of the project through regular newsletters.
Stueck claims the company did not hold annual meetings or release financial statements to investors.
“I don’t think it’s right to suggest that $430,000 should just disappear without anybody saying what happened.”
He said future value-added proposals could face an investor chill in the Portreeve area as a result of the failed hog barn project.
“The unfortunate part of it all is it has left such a sour taste in everybody’s mouth. I don’t think any of these people will invest in anything again.”
Stueck said the next step, which could include an out-of-court settlement, will be up to their lawyer.
“For once, we as shareholders will be fully informed each step of the way,” he said.
