Atcon Industrial gets 1 week reprieve

A New Brunswick judge has given the owner of the Atcon Group another week to try to save a division of his debt-ridden operation.

Justice Thomas Riordon, of the Court of Queen's Bench, has postponed putting Atcon Industries into receivership until March 22, in hopes of saving between 50 and 100 jobs.

Two weeks ago, five of the Miramichi-based Atcon companies were placed into receivership. Seven others, including Atcon Industrial, were placed under creditor protection.

'We're interested in keeping the company viable and going. And obviously the Bank of Nova Scotia and the monitor's objective may be somewhat different than mine.' Robbie Tozer, Atcon Group

After reviewing the situation, the court-appointed monitor Ernst and Young concluded that Atcon Industrial is no longer viable and asked the court Monday to shut it down immediately and sell its assets.

But the judge was reluctant to do so, stressing the jobs at stake.

He gave Atcon owner Robbie Tozer a week to work with Ernst and Young to create a restructuring plan to save Atcon Industrial and its employees.

Outside the courtroom, Tozer seemed hopeful a solution could be found.

Conflict alleged

But earlier in the day,he had accused Ernst and Young of being in a conflict of interest because the accounting company also serves as the receiver for five of the Atcon companies. Tozerasked the court to name another monitor, but his request was denied.

"I guess they have one objective and we have another," he told reporters outside the court.

"We're from the Miramichi, we're interested in jobs in the Miramichi, we're interested in keeping the company viable and going. And obviously the Bank of Nova Scotia and the monitor's objective may be somewhat different than mine."

Scotiabank, Atcon's main lender, called in its loans on Feb. 25.

In total, Atcon owes its creditors about $250 million.

Last year, the New Brunswick government extended three different loan guarantees to Atcon worth a combined $50 million.

A lawyer for the government told the court Monday that the province will have to pay Scotiabank the $50 million as early as this week and then seek repayment as a creditor.

Atcon will return to court in Miramichi on March 22.