It’s official: Burry’s Shipyard Inc. officially declared bankruptcy on Oct. 27, three months after filing a notice of intention under the Bankruptcy and Insolvency Act in July.
Now, the next step of the process begins — sale of the company assets, including its dockyard property and equipment at Clarenville, to pay bills owed to secured creditors.
Whether or not the shipyard will be sold as one single entity, or sold off piecemeal, depends on the creditors.
The first meeting of creditors of Burry’s Shipyard will be held Nov. 14 in St. John’s.
Deloitte Restructuring Inc., the licensed insolvency trustee for Burry’s, confirmed the bankruptcy via a notice in the Nov. 8 edition of The Packet.
Phil Clarke of BDO Canada, which was appointed receiver of Burry’s Shipyard, told The Packet in an interview on Friday, that after the meeting of creditors the stay of proceedings is lifted and “the secured creditors can proceed with the enforcement of their security.”
The creditors will decide where to go from there, including what to do with the assets of the company.
“There is a sales process,” said Clarke. “The process provides for all possible options, usually, in that the assets are broken up into parcels or groups of assets. The process also provides for if someone wants to buy them, they can buy them all.”
The act of purchasing the entirety of the assets, an “en bloc offer”, is usually the route for a buyer who wishes to purchase the assets with the intention of using them to reopen the business.
However, a 30-day notice is required before the sales process can begin— due to the conveyancing act in Newfoundland and Labrador.
After the 30 days, an advertisement will be published by the receiver or receivers outlining the sales process, said Clarke. After that, people would be able to bid on the assets through the tendering process, usually within a 30- to 90-day time frame.
Bad news for municipal economy
Clarenville Mayor Frazer Russell told The Packet the news of the bankruptcy is a blow to the area.
“It is disappointing,” said Russell. “I guess the only thing we can hope now is that there would be new owners in that location because I think the need is still there.”
Russell noted Burry’s had up to 150 employees at one time, and anywhere from 75 to 100 on a regular basis.
He says there’s the immediate impact on those workers, who are now out of job, as well as a direct financial impact on the town itself.
“There is quite a bit of property involved there and we were deriving taxation from the business and the property tax as well — so that certainly has an implication for the town as well when a business comes off the tax roll.”
Source: The Telegram, November 13,2018