A Saskatchewan Queen’s Bench justice was expected to decide this week whether court protection awarded to Community Pork Ventures last month will be extended.
An order under the Companies’ Creditors Arrangement Act, which allows companies to restructure while under court protection, had been granted Dec. 17. Lawyers for Community Pork and its lenders appeared in a Regina court Jan. 10.
Frank Dearlove, a Calgary lawyer representing CIBC, and Jeff Lee, a Saskatoon lawyer representing National Bank of Canada and Farm Credit Canada, both found fault with Community Pork’s restructuring plan. The other senior lenders include Bank of Montreal and Bank of Nova Scotia.
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Dearlove told the court the bank had worked with Community Pork for nine months before the CCAA process without results. He said the company’s restructuring plan is too vague.
“This existing management will not do what needs to be done,” he said.
Community Pork includes 16 farrow-to-finish hog operations in Saskatchewan and Manitoba. John Hicke, formerly of Saskatchewan Wheat Pool and the provincial Crown Investment Corp., became president and chief executive officer last summer.
Dearlove said all suggestions made by lenders have been ignored. He asked that an interim receiver be appointed.
“This may be a situation where a sale process, a liquidation, is going to have a better result than a restructuring,” he said.
Lee told court there were “no reasonable prospects for a successful restructuring with this management group in place” and he also suggested an interim receiver be appointed.
Rick Van Beselaere, Community Pork’s Regina lawyer, said the lenders are unhappy with what they see as a lack of restructuring progress.
“From the company’s perspective we’ve supplemented or revised the plan and we need to meet with the lenders to discuss it,” he said in an interview. “That hasn’t happened yet.”
The company asked the court to extend its CCAA protection until the end of March. Van Beselaere said he expected the judge would grant an extension but likely for a shorter period of time.
