Friday, January 30, 2009
Two BC tragedies and a possible 3rd, with same characters, same old plot-line
[Worthington Mackenzie pulp mill, which has been in the news lately, is shown in the photo accompanying this Vancouver Sun article in a beautiful, level, waterfront setting on the south end of Williston Lake. It is a small-size pulpmill (it could almost be a hotel), with a healthy forest all around. Very nice. A resort with condos or a casino spring to mind. Check out Mackenzie's tourist offerings here. See original article for the aerial view -- the visual impact is worth remembering -- as you read this story. Special thanks to Vancouver Sun for the news reports. - BC Mary]
Mortgage terms doomed Mackenzie mill from the start
Financier charged buyer 42 per cent a year
BY GORDON HAMILTON
VANCOUVER SUN - JANUARY 29, 2009
The Alberta owner of the Mackenzie pulp mill financed the purchase with a mortgage charging interest at 42 per cent a year, a rate that points to the likelihood of the venture failing, say industry specialists.
According to documents obtained by The Vancouver Sun, Worthington Mackenzie founder Dan White took out a $10-million short-term mortgage on the Mackenzie mill at a rate of 3.5 per cent a month through Chilliwack financier and developer Bernie Van Maren.
“There’s no way that anybody writes a debt instrument at 42 per cent with any expectation that they are actually going to collect that money,” said financier Richard Bassett, instrumental in restarting the Port Alice pulp mill in 2006.
“It highlights the risk involved,” said Paul Quinn, forestry analyst at RBC Capital Markets.
The 42-per-cent mortgage rate adds one more intriguing element to a sad tale that has left the province of B.C. on the hook for millions in Mackenzie pulp mill costs and liabilities and the town of Mackenzie without its last major employer.
The B.C. government stepped in last Sunday under emergency measures of the Environmental Management Act after Worthington Mackenzie idled the mill and the 45 people still working there. The government ordered staff to stay on the job to prevent tanks containing 15 tonnes of deadly chlorine dioxide from bursting in the cold. If the tanks were to rupture, a toxic cloud of chlorine gas could spread from the mill to the nearby town.
The global financial collapse, which tightened credit markets worldwide, is the primary cause of the mill failure.
In an e-mail to The Sun, Van Maren said the short-term mortgage financing “was intended to be repaid from a long-term financing facility (which was to include an operating line).”
White is still trying to get long-term financing.
The mill, which employed 250 people when it was operating, has been on a long, slow slide that began well before the government intervened.
It was initially a casualty of the collapse of venerable forest giant Pope & Talbot, which sought creditor protection in 2007.
The mill was sold in September for $6.5 million to White, an Edmonton developer with no background in forestry and a past that includes a conviction for money laundering. He used a chain of companies, which have only one director and no executive officers, to make the purchase.
The attorney-general’s ministry is now trying to trace the corporate links back to a company with the cash to recover the costs of running the mill.
The purchase was recommended by the receiver in charge of the sale, PricewaterhouseCoopers, and approved by the B.C. Supreme Court without any objection from the province, which was an intervener in the insolvency hearings. Mill workers in the northern resource town were initially ecstatic when Mackenzie sold, believing their jobs would soon be back and the town’s economy would be revived. Now they are angry.
“They have destroyed thousands of lives up here,” said former employee Rick Berry, referring to the court-approved sale of the pulp mill. “They are the professionals. We are supposed to put our trust in them. They let us down. And the Supreme Court approved it?”
Taxpayers are now paying an estimated $1 million a month to keep the mill’s chemicals from creating an environmental disaster. And if mill owner White, who bought it through shell company Worthington Mackenzie, fails to get fresh financing, the province will be saddled with $30 million to $50 million in environmental rehabilitation costs.
White was not available for comment Thursday. However, he sent The Sun an e-mail headed, “dealing and wheeling, not kneeling.” The e-mail reveals White is trying to sell assets.
The sale to White was recommended to the B.C. Supreme Court last summer by the receiver after an earlier deal to Asia Pulp & Paper fell apart. Further, the $6.5-million price was for a mill that had been stripped of its fibre supply — a crucial element in any plan to restart it — in a side-deal between the receiver and Canfor Corp., which held the fibre supply licence.
Don Lamoureux, owner of Faltech Resources Canada, a Prince George company that put a proposal together on the mill that included the fibre supply, wondered how PWC failed to do a background check on White.
“They did a thorough background check on us,” he said.
The province also could have stopped the process at any time, said Bassett. The B.C. government had already set the precedent. It stepped in earlier by urging the court to take into account bigger issues — employment — in determining the fate of Pope & Talbot’s Harmac pulp mill.
The court ultimately approved a bid by Harmac workers who were investing their own money to keep the mill operating.
“The province could have made its concerns known to the judge just as they did in the Harmac case. The judge could then have said the court would like to see the business case on how [Worthington Mackenzie] is going to do this.”
And now, for something completely different only pretty much the same, here is the Vancouver Sun's story of how the law failed the families of Shirley Rosette and Gerald Foisy [and by the same process, many people believe that the law is also in danger of failing us in the BC Rail Case]. - BC Mary.
Ferry sinking: We may never know what happened
BY IAN MULGREW,
VANCOUVER SUN - JANUARY 30, 2009 8:11 AM
VANCOUVER -- The public may never hear what actually happened aboard the Queen of the North ferry the night it hit Gil Island and sank, killing two people, because the family of the victims can’t afford B.C.’s exorbitant court fees.
Vancouver lawyer Peter Ritchie said an out-of-court settlement was reached in the case when it became clear the law was stacked against the family and the costs of going to court were too prohibitive.
En route from Prince Rupert to Port Hardy on March 22, 2006, the ferry left its intended path down Granville Channel for 14 minutes and went a mile off course before smashing into the island.
Ninety-nine people were rescued and taken to Hartley Bay.
BC Ferries admitted liability for the deaths of Shirley Rosette, 42, and her partner, Gerald Foisy, 46, who are presumed to have drowned.
The two crew members named in the suit — fourth officer Karl Lilgert and quartermaster Karen Bricker — also acknowledged liability.
Foisy's children, 19-year-old Brittni Lee and 15-year-old Morgan Taylor, who live in Penticton with their mother, Lana Foisy, had hoped to learn what happened the night of the sinking.
Now they won’t.
They were forced to settle out of court, said Ritchie, who acted as their lawyer, because they did not have at least $55,000 to pay up front the required fees and witness costs.
“If one of your loved ones dies because of grossly negligent actions aboard a B.C. ferry, don’t go looking for justice in the province of British Columbia,” Ritchie complained Thursday to a packed media conference.
“Unless you are wealthy in B.C. you cannot go to court. The people of B.C. will never get a chance to hear in court why or how two people died in the Queen of the North disaster. Very sadly, two lovely teenage girls from Penticton will never know what happened to their father. The two girls loved their father and our so-called justice system has let them down.”
He did not divulge the amount of the settlement.
Ritchie called the situation that forced the girls to abandon their search for answers “scandalous” and “monstrously unfair.”
Liability falls under the Marine Act, he explained, which sets an upper limit of damages at $330,000 in a judge-alone trial unless recklessness can be proven — a near impossible task under the law as it is written.
A jury would not be restricted by precedent, Ritchie said.
Once a jury heard the facts of this case, he thought its award would be higher — “very favourable towards the girls,” an award to make the ferry company “sit up.”
In his opinion, the case exposed the sorry state of the law covering the tragedy, the outrageous fees charged in B.C. and the hard-hearted ethics of BC Ferries.
Rosette's family, who had been part of the litigation, settled earlier this month.
Until now, many thought the truth about the sinking would be revealed at the wrongful-death civil trial set to begin Monday when those responsible would be compelled to testify in open court and be cross-examined on their actions.
B.C. is the only province in Canada that charges courtroom fees that are prohibitive. To rent the courtroom was going to cost the girls $15,000 — up front, Ritchie said.
As well, their right to a jury trial was dependent upon paying $25,000 — again, up front — even though jurors get a pittance. That’s $40,000 just for starters.
Ritchie said he estimated it would cost another $15,000 at least to pay for the 14 witnesses from BC Ferries to travel from Prince Rupert to Vancouver to attend the trial. He said he asked the ferry corporation to pay the costs of its employees given the situation, but it refused.
Those costs are on top of fees such as the $208 charged to stamp the writ and the $208 added on for getting on the trial list, Ritchie said.
In Alberta, trial fees would have totalled $800, he figured, in Ontario, $645. Saskatchewan charges $15 an hour and its jury fees are fixed at $200.
Ritchie said he believes BC Ferries did not want a jury or the public to hear all the facts about what happened:
The woman at the helm didn’t have a clue what she was doing; there were two instead of three people as required by regulation on the bridge and perhaps only one; the ferry was travelling with its watertight doors open, against its policy; there apparently was no evacuation plan; cabins and some areas of the ship were not searched to ensure all the passengers got off.
The crew didn’t know what cabins had been searched because they couldn’t find the chalk they were supposed to use to mark a big X on those that had been cleared; they didn’t have pencils or flashlights so they couldn’t do an accurate headcount; and there was evidence of illegal drug use by the crew.
Needless to say the crew of 42 all got off safely.
There were only 59 passengers aboard — there could have been 650, and this could have turned into one of the worst maritime disasters the coast has seen.
Although the crew members were fired, no one has been held accountable for the systemic problems revealed by this tragedy — the ferry travelling with its doors open, the common use of drugs on board the ship, the lack of discipline, the lack of an evacuation plan…
The ferry corporation has avoided scrutiny in spite of the indications it was rolling the dice with public safety.
Ritchie said he didn’t understand why the provincial government had not called a public inquiry.
So far, there have been only rumours about what happened on the bridge before the crash between Lilgert and Bricker, former lovers working their first night shift together after breaking up.
The Transportation Safety Board, in its report, said the two were distracted by a “personal conversation” before the ferry sank while on autopilot.
Ritchie pointed to Grouse Mountain across Burrard Inlet from his downtown Vancouver office — “Gil Island looks like that mountain and they ran roughly from here to there at high speed for 14 minutes and smashed into it.”
Other crew members putatively heard Bricker later say: “It’s not my fault, it’s not my fault, oh my God ... I was alone.”
Ritchie said BC Ferries threw up roadblocks every step of the way, even refusing to acknowledge the couple had died aboard the ship, forcing the family to obtain a judicial ruling that they were dead.
BC Ferries did not have an immediate response Thursday to Ritchie’s comments.
Read another Vancouver story about the law in B.C., "Infringing Civil rights ..." Ian Mulgrew reports on well-known Vancouver lawyer Cameron Ward's battle for redress after his wrongful arrest.
Again: Very special thanks to Vancouver Sun for two outstanding news stories.
- BC Mary.
Before this suit, Chief Justice Brenner personally intervened in a prior QOTN suit, Kotai v (parties), and framed the case structure that was applied here.
Mulgrew, Smyth, Hall, etc do NOT criticize Supreme Court management. Why not? They don't have to wait the 5 weeks to hear hearing audiotapes, like the rest of us. And they are invited to Brenner's numerous receptions, at public expense.
Watch the Canwesties dump this case in the elitist memory hole, at first opportunity.
because "....at a rate of 3.5 per cent a month through Chilliwack financier and developer Bernie Van Maren."
Bernie Van Maren???? now where have I seen that name crop up in the news media within the last year?
Oh yes. The headline was:
"John Les faces second probe
Agricultural Land Commission will look into land dealings involving former solicitor-general" - Chad Skelton, Larry Pynn, Lori Culbert, Vancouver Sun
Published: Thursday, April 03, 2008
Les owned a numbered company that bought the Rosebank Place property with Bernie van Maren, the president of a large Chilliwack real estate development company.
I realize that the RCMP are busy on many fronts combatting alledged crimes yet to be proven in the Courts and the Agriculture Land Commissioners, being the appointed pawns of the BC Liberals are in no hurry to cast any.... disparaging comments on their benefactors, but with April first coming closer... just when the heck is the public going to be told what the status is of MLA John Les before the next provincial election?
MLA John Les was under investigation for NINE months before he asked the Premier to accept his resignation as the Solicitor General of British Columbia. Why is it that every thing that the BC Liberals have touched and ends up before the courts, takes so long to be settled?
Thank you, Grumps,
You deserve another medal for your Eagle Eye and sharp memory!
So another set of dots connect the Mackenzie Pulp Mill situation to members of the reigning government in Victoria.
Perhaps this explains why they did act so swiftly to take responsibility for the pulpmill when critical dangers were exposed ... which suggests that the government in Victoria did know a lot about the mill.
"Just across the street from where the school site has been proposed is a new residential development being built by Van Maren Construction, a homegrown Chilliwack-based business.
Well, last spring I was delighted when one of the principals of Van Maren Construction contacted me to see if I'd be interested to know that this housing project would be the first geothermally heated housing project in all of Chilliwack. Of course I was interested and went out and took a look at that project."
Well gee whiz Environment Minister, what do you have to say about one of the principals of that same Van Maren Group who orchestrated the means by which they handed over a $10 million mortgage, at 42% interest, so that some yahoo real estate developer(without any pulp mill experience) from Alberta, so he could stick the BC taxpayers with a $1 million monthly expense bill to make sure the chlorine doesn't explode.
That $1 million monthly fee would go a long way to retraining the workers who have been left adrift in MacKenzie with monies left over for all the other devastated forestry jobs that the BC Liberals have chosen to ignore, until its too late.
The BC Liberals claim in a Confidential Cabinet Document that with the $1 Billion they received from CN Rail they put $135 million towards creating a northern economic development opportunity for British Columbians.
"Specifically, this initiative is intended to give the NDI’s Board of Directors and its four Regional Advisory Councils (RACs) the ability to manage a $135 million Trust that can be used for strategic investments in forestry, pine beetle recovery, transportation, tourism, mining, energy, Olympic opportunities, small business and sustainable economic development.
This submission seeks approval to draft legislation aimed at establishing and funding the NDI, for introduction in the Legislature pending the finalization of the BC Rail Investment Partnership with CN Rail, anticipated this fiscal year."
In a recent Vancouver Sun article the Board of Directors of the the NDI decided to go for a walk on the wild side of the economy by plunking "their" money down on mutual funds, rather than GIC .... for a loss of 33%, but that's not the real sin here, its how the people of MacKenzie were royally screwed by the BC Liberals.
The headline from Pristine Power is:
"The Mackenzie Green Energy Centre is an excellent northern economic development opportunity for British Columbia..." we all know now it WAS an excellent idea that went terribly wrong.
Supreme Court of Canada, Bank of Canada v. Bank of Montreal,  1 S.C.R. 1148 page 1154 (from Bills of Exchange Act)
176.(1) A promissory note is an unconditional order in writing made by one person to another person, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to the bearer.
What is said to be an unconditional promise to pay a sum certain in money is itself money:
Mackenzie Pulp Mill Gets Rail Service Back
From Forest Talk, 2007:
You raise a very interesting point, 8:51. I don't suppose there was passenger service on that rail line ... and am wondering if CN is even running freight trains into Mackenzie these days.
So ... as you suggest ... this could become an "abandonned" line, with ramifications!!!
HooEEEE. Let's look into that, eh?
The only surprising thing about this is that Mr. White only was the recipient of government largesse and government "looking the other way" or not looking at all (performing due diligence).
With his background in organized white collar crime it is surprising he wasn't actually in government as perhaps the chief aide to the Minister of Forests.
So many crooks, so few seats in cabinet or postions in the top level beauracracy!
But I read the "Mild One Online yesterday and Smilin' Sammy assured me that the taxpayers of Vancouver would all become rich as a result of his short-lived muni government's mastery of the art of Real Estate Speculation, and how could anyone doubt Sam I Yam????
And how can the voters trust anyone but Gordo in Tough Times? Even though he apparently was the last guy on earth (well along with the Human Sneer known as Colin Hansen) to see tough times a-coming!!!!!!