Business guru says Atcon was beyond help

The former chair of an advisory board for the Miramichi-based Atcon Group says he and his colleagues were called in too late to help turn the companies' troubled finances around.

Purdy Crawford, one of six successful business leaders who agreed last fall to lend their expertise, said it became apparent within a month or two that it wasn't going to be possible.

"I can't point to a significant incident. I mentioned one - the Deh Cho Bridge [contract in the North West Territories], issues of cash flow and customers slow in paying their bills," he said.

'I'm pretty optimistic this will unfold reasonably well for the province.' Purdy Crawford, former Atcon advisory board chair

"Once one supplier starts raising trouble, they all become more difficult to deal with and the house of cards starts going down."

Crawford said Atcon's main problems have been the recession, design problems with the $165 millionDeh Cho Bridgecontract it lost in Januaryand a lack of sophistication and discipline by company president Robbie Tozer and other managers.

Receivership hearing held

He made the comments Monday, when the financially troubled construction company was scheduled to appear in a Miramichi court for a receivership hearing.

Atcon's biggest creditor, Scotiabank, called in its loans last Thursday. Scotiabank filed court documents requesting that some of Atcon's companies be placed in receivership.

In one filing, the bank is asking the court to place several Atcon companies under the Companies Creditors Arrangement Act, which will allow a court-appointed monitor to watch Atcon while it continues to operate.

The second filing is under the Bankruptcy and Insolvency Act, which is being applied to the rest of Atcon's companies.

Last year, the New Brunswick government extended three different loan guarantees to Miramichi-based Atcon worth a combined $50 million. Those were on top of earlier loan guarantees and loans, which elevated the provincial government's exposure to roughly $70 million.

"I'm pretty optimistic this will unfold reasonably well for the province," Crawford told reporters, pointing to Atcon's "good assets."

"I can't predict how much the province will be out of pocket or how much the bank will be out of pocket, but I would be hopeful the number will not be overly significant."

Asked about the impact on employment in Miramichi, Crawford said he expects it will be "negative" in the short-term.

"Long term I doubt if it will be that significant," he said.

High hopes for president

Crawford suggested Atcon president, Robbie Tozer, a "typical entrepreneur," grew the businesses too fast.

But he also praised Tozer's intelligence and personality and is optimistic he will make a comeback on the New Brunswick business scene.

"He'll rise from the ashes and be a credit to New Brunswick some day, I'm sure," he said.

"Some of the groups he was doing construction work for have a lot of confidence in him, some of the suppliers of equipment have a lot of confidence in him and I'm hopeful he can pick that up and in a very short order get some businesses going on his own."