CEO says it’s premature to speculate on any proposal

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By Kirk Starratt

kstarratt@kentvilleadvertiser.ca

NovaNewsNow.com

The Chief Executive Officer and chair of the board of directors of ACA Co-operative Limited says it’s premature to speculate on how much money would be involved with a proposal for unionized employees following a period of creditor protection for Eastern Protein.

Ian Blenkharn said any comments made in regard to ACA transferring debt from their primary processing plant in New Minas to the Eastern Protein Plant in Kentville, which is closing permanently and currently under creditor protection, are completely and utterly false. “I personally wouldn’t be associated with an entity that played games like that,” he said.

Blenkharn drew attention to the original news release issued by ACA Jan. 22, which states clearly that union employees at ACA’s New Minas plant who are being laid off would have a choice between accepting a layoff to maintain seniority in the event of a call back or accepting severance consistent with the terms of their collective agreement. Non-union ACA employees whose jobs are ending permanently will receive severance payments.

Employees at Eastern Protein will receive compensation as determined by creditor protection procedures. ‘Jumping to all sorts of conclusions’: Blenkharn

He said the affected Eastern Protein employees - 187 unionized and 20 non-unionized - are unfortunately all in the same boat. In terms of vacation pay, sick pay and severance, everyone is caught in the same position as the company files for creditor protection. “People are jumping to all sorts of conclusions,” he said, pointing out the company never said there would be no money for unionized employees. Everyone has seen the list of creditors and what is owed. There probably won’t be 100 cents on the dollar for everybody, but there won’t be zero cents on the dollar either. Unfortunately, it’s too early to tell.

Until the Eastern Protein plant closes permanently and they see the books, they won’t be able to sit down and come up with a proposal for creditors. He said the closure has been handled in this manner so all stakeholders, including affected employees, could vote on whether or not it’s good for them. If the proposal is bad, they can vote it down.

In other words, if 50 per cent of the people eligible to vote, representing 66.6 per cent of the dollars involved, vote in support of the proposal, it will pass. If not, Eastern Protein would be placed immediately in bankruptcy. Blenkharn said they could have filed for bankruptcy and closed the plant immediately, but he and the board of directors are trying to treat employees, customers and other stakeholders in as fair and honourable a manner as possible.

In terms of simplicity, it would have been easier to simply close the plant and file for bankruptcy, but everyone involved has to live and work in this community so they’re trying to do what is reasonable and fair.

Since they had 30 days of creditor protection for Eastern Protein as of Jan. 22, the plant would still be operating for a few days after the protection period ended and management wouldn’t have the final numbers available to establish a proposal. Therefore, they’re asking for a 45-day extension to the protection period so they can come up with a proposal that treats both secured and unsecured creditors the best they can.

Worse than first anticipated

Representatives of the Canadian Auto Workers Local 2216 and the Annapolis Valley Labour Council have requested assistance from local municipalities to pressure the provincial government to place the remaining $1.5 million of a $3.5 million loan to ACA in trust until the creditor protection period is over so there will be money to pay unionized employees the $1.3 million owed to them.

However, Blenkharn said the $3.5 million loan that ACA received has been able to secure jobs to this point. The company had hoped to find a solution to keep both plants open, but the financial picture was worse than first anticipated.

Blenkharn is concerned that if the remaining $1.5 million from the loan goes specifically toward what is owed to unionized employees, they might not be able to keep the remaining 350 jobs in place. The real threat is a plant closure for everyone.

He said he appreciates the position of the union, asking why ACA should get the money if unionized workers haven’t been paid what they are owed. However, a request is being made before anyone sees a proposal and the request is unreasonable in the big picture. ACA and its Eastern Protein subsidiary have been losing $150,000 to $200,000 every few weeks and management is willing to incur more losses in the business in the short term to make the situation as good as possible for the affected employees.

Organizations: ACA Co, Canadian Auto Workers, Annapolis Valley Labour Council

Geographic location: New Minas, Kentville

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