Close to 300 unsecured creditors of bankrupt local oilfield construction firm CerPro Energy Services won’t be getting paid, according to newly released documents.
Court-appointed receiver Ernst and Young reports that the roughly $7 million in cash it recovered from CerPro will be distributed to two of the company’s 22 secured creditors.
However, a long list of unsecured creditors, many of whom work in Medicine Hat's oilpatch, will collectively take a $4.7-million hit from CerPro’s unpaid debts.
“The net recoveries are less than the amounts owing to CerPro’s secured creditors, and accordingly, there will be no recovery for the unsecured creditors,” Ernst and Young states in its latest report.
The documents show a public auction of CerPro’s assets last December grossed about $6.5 million – far less than the $18.5-million appraised value of the firm’s equipment and machinery alone.
Ernst and Young reports that CerPro’s largest creditor, HSBC Bank Canada will receive about $5 million in the settlement. That’s less than half of the money CerPro borrowed from the bank.
A second secured creditor, General Motors Acceptance Corp., will be paid out just over $100,000, which is roughly a quarter of the company’s claim against CerPro.
Ernst and Young is currently trying to recover $1.1 million from the City of Saskatoon for CerPro’s work on the city’s Rosewood residential development.
However, an Alberta-based company known as the Tory Group has filed a $700,000 lien against the Rosewood project for services the company claims it provided to CerPro and Ernst and Young. Until the dispute is resolved, the receiver says it is unable to recover money owed to CerPro from the Rosewood project.
Meanwhile, Canadian Road Builders is disputing a large portion of an $850,000 bill from CerPro for services rendered on the so-called “Acheson project” in Edmonton.
Ernst and Young has filed a lien against Canadian Road Builders in a bid to recover the full amount the company allegedly owes CerPro.
When CerPro filed for receivership last July, the firm was $21.5 million in debt to more than 300 creditors.
The oilfield and industrial construction services company employed more than 250 workers at the height of the oil boom in Alberta.
Last November, the firm moved to its current location on Highway 524 near Redcliff, just as the oilpatch began slipping into a severe downturn.
According to Canadian Public Auction Ltd., the company that oversaw the recent fire sale of CerPro’s assets, CerPro’s newly constructed 16,000-square-foot shop and the 40 acres of land it's situated on will be put on the auction block this spring.