Receiver takes over Meadow Creek Cedar owner’s farm
After staving it off for several months, a Surrey blueberry farm that belongs to Meadow Creek Cedar owner Dale Kooner has been placed in receivership.
Last month, a judge appointed accounting firm KPMG receiver of all assets for Can-Pacific Farms Inc.
A report filed by a court-appointed monitor on June 7 also suggested Kooner might have a buyer for Meadow Creek Cedar.
“Mr. Kooner is in discussion with an interested party who is considering a purchase of the Meadow Creek Cedar Ltd. property, assets, and forestry licenses,” wrote Lloyd W. Murphy of Murphy and Associates.
“The proposed sale would net Mr. Kooner approximately $6 million. These funds are in addition to the sale of the trucks and trailers used by Meadow Creek Cedar Ltd.”
Kooner has been trying to sell two trucks and four trailers that hauled for Meadow Creek Cedar. They were registered to Daminis Transport and Partap Farm and Transportation, both taken off the road for safety violations or refusing to provide documents to provincial auditors. Kooner is the sole owner of Daminis, while his son Justej owns Partap.
According to Murphy, one logging truck sold on June 12 for $71,000. The dealer said there was interest in the other, but didn’t expect it to change hands before the end of June.
“We confirm the trucks and trailers are properly licensed for the road and are insured with ICBC,” Murphy wrote.
In the same report, he said Meadow Creek was “still logging and selling raw logs. The monitor is not aware of any funds being advanced from Meadow Creek Cedar to the farm.”
It’s unclear how Meadow Creek could have been logging last month, given that its license has been suspended since the end of February for failing to meet reforestation obligations.
The order placing the Surrey farm in receivership was originally granted in March as part of foreclosure proceedings brought by the Canadian Imperial Bank of Commerce.
It was delayed, however, while the company sought creditor protection.
CIBC loaned Can-Pacific $10 million in April 2010 as part of plans to build a commercial freezer, but three months later demanded repayment on the balance owing of $7.4 million. No payments were made, and following a series of reprieves, foreclosure began, and the farm was listed for sale by court order.
On May 10, a drug squad visited the farm as part of an ongoing investigation and removed some product from containers that belonged to Best Oriental Foods Ltd., which had a storage agreement with Kooner.
Murphy said Kooner “disavows any knowledge whatsoever” of the investigation, and subsequently cancelled the deal with Best Oriental.
In his final report of June 18 before being discharged as monitor, Murphy revealed another farm tenant, Viet Long Construction Ltd., recently converted a portion of its space to grow medical marijuana.
“Viet Long has been approved as a grower of medical marijuana and has proceeded to plant its first crop for Health Canada,” Murphy said.
He obtained copies of the licenses and confirmed Viet Long is proceeding in accordance with them.
COMPANY IGNORES ‘REPEATED REQUESTS’
Additional court orders last month prohibited Kooner or his employees from removing any assets from the farm, and prevented Can-Pacific from writing any cheques without Murphy’s consent.
Days later, Kooner was instructed to file an affidavit explaining the attendance of trucks on the farm on two occasions and what, if anything, they removed. Murphy was also asked to report on any missing assets. His inspection found everything still there except a Daminis pick-up truck in for repairs and a rented storage container removed without Murphy’s consent.
“This matter has been thoroughly discussed with the principal and has resulted in tighter control of the farm gate,” Murphy wrote. (CIBC has private security outside the farm, which Can-Pacific has been partly on the hook for.)
Murphy also indicated that despite “repeated requests,” Can-Pacific and its bookkeeper failed to provide him with “accurate, adequate, and timely” information on its receipts, disbursements, and cash flow projections.
In addition to the potential sale of Meadow Creek Cedar, Kooner was reportedly in discussions with Manjeet and Raman Samra, who hold a second mortgage on the farm, to buy its assets for $8.5 million and then lease them back to him.
It was also suggested Kooner might be able to secure up to $400,000 from his brother, who sold a property in Richmond.
None of it came to fruition fast enough, however, as the receivership order finally took effect on June 15.