Minister sets record straight on New Ferolle fish plant situation

Trevor Taylor, Minister of Fisheries and Aquaculture, today clarified misinformation surrounding the dispute between two companies that led to the shutdown of the New Ferolle fish plant.

From the outset, the Department of Fisheries and Aquaculture (DFA) has been concerned about its potential liabilities if it were to re-issue the licence to James Doyle (Sr.) & Sons Limited, or transfer the processing licence for the New Ferolle plant to Ice Cap Fish Co. under the current circumstances. Prior to 2004, the licence was held by James Doyle (Sr.) & Sons. T he government requires that outstanding financial and legal matters of that party be addressed in advance of any transfer or renewal request. As a result of legal advice received, the department has determined that it must resolve these issues in advance of re-issuance so that its security position and that of others is not eroded.

Faced with financial challenges, James Doyle & Sons entered into a lease arrangement with Ice Cap Fish Co., which operated the New Ferolle plant in 2003 without the department�s knowledge or authorization, and without being issued a valid licence to do so. The department subsequently became aware of this and the companies were advised in late 2003 that the licence would not be re-issued for the 2004 season until all issues between the government and James Doyle & Sons were resolved, including the issue of third party creditors. Government has continued to reiterate this position. On April 29, 2004, two departmental inspection officers detained approximately 15,000 pounds of processed snow crab at the New Ferolle plant. This product had been processed without a valid licence having been issued.

Minister Taylor says that government officials are seeking a solution to resolve the outstanding financial and ownership issues. "This is a matter of two companies that entered into a legal arrangement that appears based on the premise that government would transfer a licence. The result of this would make my department potentially liable for one of the companies� debts, or so erode the financial securities that recovery would be difficult if not impossible. Unfortunately, secured and unsecured creditors, not to mention the plant workers in New Ferolle, are caught in the middle," said the minister.

"A financial solution is needed that addresses the interests of secured and unsecured creditors. The government has received an offer by one of the parties and this was deemed unacceptable. Discussions are ongoing on securing a new proposal for a viable business solution that includes addressing the government�s liability and security concerns," said Minister Taylor. "Government officials are working towards a solution that will provide stability and long-term benefits to the community of New Ferolle. But this is a complicated matter with a number of financial and liability concerns. We are working to resolve the situation as quickly and diligently as possible."

It is a matter of public record that there are registered judgments of approximately $360,000 against James Doyle & Sons. The company additionally owes the provincial government approximately $770,000 in defaulted loans. James Doyle & Sons also has a number of other secured and unsecured creditors.

Minister Taylor, who is currently travelling in his district on the Northern Peninsula, will announce any developments in a timely manner.

Media contact: Alex Marland, Communications, (709) 729-3733

2004 05 07                                         1:20 p.m.