Prendiville Industries bankruptcy includes sawmill
https://www.kenoraonline.com/local/prendiville-industries-files-for-bankruptcy
Court documents listed by Ernst & Young show Prendiville Industries — who operate Kenora Forest Products — has filed for bankruptcy. The list of creditors filed with the court is 14 pages long, and it shows the company owes a total of $28.7 million.
The filing was initially made Dec. 5 in Winnipeg, and the list of creditors includes:
- Canadian Imperial Bank of Commerce (CIBC) – $13.7 million
- FedNor – $3 million
- Northern Ontario Heritage Foundation Corporation (NOHFC) – $2.5 million
- Province of Ontario – $1.8 million
- Business Development Bank of Canada (BDC) – $1.5 million
- Miitigoog $349,273
- Lawrence Derouard Trucking – $112,013
Documents filed with the court also include security for CIBC loans valued at more than $32 million, with the bank holding a mortgage on the sawmill property worth about $16 million. The bank moved to secure their loans in the first week of December. By then, the company owed the bank closer to $14 million, but CIBC still agreed to loan up to another $1 million, in order to see the company through to a potential sale in mid-February.
The BDC issued a letter last month, saying the company had also defaulted on loans worth about $1.5 million.
Potential buyers have until Feb. 14 to tender an offer, with the sale to close in April.
Between the end of October and mid-February, the company estimates it will have cash receipts of more than $6.5 million, cash disbursements of $4.5 million for a difference of about $2 million.
Kenora Forest Products announced they were laying off their staff of more than 100 in September. The sawmill had been doing well — adding shifts to reach full production last November — until the impact of American tariffs on softwood lumber could no longer be ignored. The company has about $9 million tied up in tariffs, impacting their bottom line.
Prendiville Industries invested heavily in the sawmill, bringing it back into production in 2015, said company president Maureen Prendiville in her affidavit to the court. She said about $22 million was invested in refurbishments of Kenora Forest Products, with another $4 million added, after a kiln fire in December 2017. Despite high lumber prices at the time, the company wasn’t able to take full advantage, due to the fire, she noted.
Prendiville Industries had about 145 staff, when it filed for bankruptcy, including the sawmill operations and its headquarters in Winnipeg. Through the bankruptcy proceedings, the layoffs would become permanent. Prendiville said the company was current with its pension and benefit obligations to workers.
The obituary for Joe Prendiville said he started the company with a sawmill in 1951, after he had emigrated from Ireland to Manitoba. The company has also operated:
- Prairie Forest Products in Neepawa, where it produced pressure-treated lumber, was sold in 2018
- Norwest Manufacturing in Thompson, where it produced items for the mining industry, closed earlier in 2019
- Ryan Forest Products in Winnipeg, where it produced lattice fence panels, which ceased operations in 2014
According to her affidavit, Maureen Prendiville said she served as the company’s president, with her brothers Ailbe Prendiville and Lawrence Prendiville serving as vice-presidents.
Maureen Prendiville expects the sale of assets to bring in enough money to cover their debts. She added the sale of the sawmill assets, or fresh investment in Prendiville Industries, will:
- permit operations at the sawmill to be restarted by a new owner, bringing significant employment and other benefits to the local and area economies,
- the re-establishment of a key customer for area loggers and
- the continuation of important forest resource management initiatives.
For more information:
Company history and president’s affidavit
Weigh scale agreements and forest management agreements
CIBC loan agreements and cash flow statements