Post by ferryfast admin on Mar 22, 2006 0:02:46 GMT -5
Deadline passes for ailing ferry firm
No proposal was possible by deadline, a company director said
Fiona Anderson, Vancouver Sun
www.canada.com/
Published: Tuesday, March 21, 2006
The company running the HarbourLynx passenger ferry sevice between Nanaimo and Vancouver was to have officially sunk overnight.
Midnight Monday was the deadline for the insolvent company behind the ferry -- Nanaimo Harbour Link Corp. -- to file a proposal on how it could stay afloat.
But no proposal could be filed by the deadline, said John Cavers, who calls himself the company's "last standing director."
"[Monday] at midnight, it's all over," Cavers said in an interview.
The company filed for bankruptcy protection on Feb. 17 and had 30 days to file a proposal to keep it from being deemed bankrupt.
Cavers said there were several problems that hurt the ferry service, which started serving foot passengers travelling between downtown Vancouver and downtown Nanaimo in October 2003.
Probably the most pressing problem was the breakdown of one of the ferry's engines, which took the ship out of service on Feb. 2.
"[The company] was making an operating profit [but] operating profits are not necessarily a good strong positive cash flow," Cavers said. "The cash flow was adequate until the engine went 'poof', and really that was it."
Another problem was HarbourLynx's fight with the provincial government over a $500,000 tax bill.
The company paid social services taxes when it purchased the ferry, but argued the money was not owing. The province agreed and returned the tax, only to change its mind after the company had spent the money on operating expenses, Cavers said.
The ferry also ran up against resistance that made the playing field less than level, Cavers said. The provincial government subsidized seniors taking BC Ferries during the week, but HarbourLynx was refused the same deal, he said. As well, TransLink was reluctant to allow HarbourLynx to put up the signage it wanted directing people to the ferry in the SeaBus terminal in Vancouver, Cavers said.
"The whole thing has been uphill," he said.
The intial investors had no further money to invest in the project, leading the company to look for new investors. There were a lot of discussions, but none that led to a deal, Cavers said.
"I think a lot of folks are waiting in the weeds to see if they can pick it up at the usual 10 cents on the dollar," Cavers said.
The City of Nanaimo and the Nanaimo Port Authority offered sympathy but nothing else, Cavers said.
Asked if he was disappointed Cavers said, "very much so."
The Washington Marine Group -- which is currently looking at the possibility of reinstating the three fast ferries it bought from the province for a service between Vancouver and Duke Point just south of Nanaimo -- said it was unlikely to take over HarbourLynx, despite earlier suggestions it was interested.
"We have had no dialogue with the current owners, and from reports that the vessel is not the correct type for that service, it is unlikely we would get deeply involved in that business," said Kelly Francis, Washington Marine Group's communications coordinator.
The next step in the HarbourLynx saga is up to the secured creditor which is owed $4.5 million, said Phil McCourt of Abakhan & Associates Inc., which had agreed to act as trustee on behalf of the unsecured creditors.
fionaanderson@png.canwest.com
No proposal was possible by deadline, a company director said
Fiona Anderson, Vancouver Sun
www.canada.com/
Published: Tuesday, March 21, 2006
The company running the HarbourLynx passenger ferry sevice between Nanaimo and Vancouver was to have officially sunk overnight.
Midnight Monday was the deadline for the insolvent company behind the ferry -- Nanaimo Harbour Link Corp. -- to file a proposal on how it could stay afloat.
But no proposal could be filed by the deadline, said John Cavers, who calls himself the company's "last standing director."
"[Monday] at midnight, it's all over," Cavers said in an interview.
The company filed for bankruptcy protection on Feb. 17 and had 30 days to file a proposal to keep it from being deemed bankrupt.
Cavers said there were several problems that hurt the ferry service, which started serving foot passengers travelling between downtown Vancouver and downtown Nanaimo in October 2003.
Probably the most pressing problem was the breakdown of one of the ferry's engines, which took the ship out of service on Feb. 2.
"[The company] was making an operating profit [but] operating profits are not necessarily a good strong positive cash flow," Cavers said. "The cash flow was adequate until the engine went 'poof', and really that was it."
Another problem was HarbourLynx's fight with the provincial government over a $500,000 tax bill.
The company paid social services taxes when it purchased the ferry, but argued the money was not owing. The province agreed and returned the tax, only to change its mind after the company had spent the money on operating expenses, Cavers said.
The ferry also ran up against resistance that made the playing field less than level, Cavers said. The provincial government subsidized seniors taking BC Ferries during the week, but HarbourLynx was refused the same deal, he said. As well, TransLink was reluctant to allow HarbourLynx to put up the signage it wanted directing people to the ferry in the SeaBus terminal in Vancouver, Cavers said.
"The whole thing has been uphill," he said.
The intial investors had no further money to invest in the project, leading the company to look for new investors. There were a lot of discussions, but none that led to a deal, Cavers said.
"I think a lot of folks are waiting in the weeds to see if they can pick it up at the usual 10 cents on the dollar," Cavers said.
The City of Nanaimo and the Nanaimo Port Authority offered sympathy but nothing else, Cavers said.
Asked if he was disappointed Cavers said, "very much so."
The Washington Marine Group -- which is currently looking at the possibility of reinstating the three fast ferries it bought from the province for a service between Vancouver and Duke Point just south of Nanaimo -- said it was unlikely to take over HarbourLynx, despite earlier suggestions it was interested.
"We have had no dialogue with the current owners, and from reports that the vessel is not the correct type for that service, it is unlikely we would get deeply involved in that business," said Kelly Francis, Washington Marine Group's communications coordinator.
The next step in the HarbourLynx saga is up to the secured creditor which is owed $4.5 million, said Phil McCourt of Abakhan & Associates Inc., which had agreed to act as trustee on behalf of the unsecured creditors.
fionaanderson@png.canwest.com