Burry's Shipyard deemed bankrupt, mayor hopes for sale
Burry's Shipyard of Clarenville is bankrupt after missing a court deadline to lay out a plan to pay back its debt.
The company was deemed bankrupt on Oct. 27, three months after it filed for protection under Canada's Bankruptcy and Insolvency Act.
Clarenville Mayor Frazer Russell called it disappointing — but not surprising — news.
"It seems terrible to me," he said, "as I drive by that wonderful facility that has existed down there now for some 76 years, the thought that it is no longer going to be in operation."
The Burry Group bought the operation in 2011, but the shipyard had operated in Clarenville for decades before that.
The shipyard laid off more than 100 employees this summer, after it lost the contract for work on the MV Gallipoli.
Creditors met in St. John's on Tuesday to discuss the next steps in the bankruptcy proceedings. The shipyard owes almost $5 million to companies, including almost $1.1 million to the Business Development Bank of Canada.
The shipyard also owes $1.6 million to its sister company, Norcon Marine Services, which is also owned by the Burry Group.
According to reports filed in Newfoundland and Labrador's Supreme Court by Deloitte, which has been appointed as the trustee in the bankruptcy matter, the Burry Group sought out a sale of shipyard assets during the last three months but couldn't secure a suitable deal. Heddle Marine Services is listed in one report as a prospective buyer.
Glenn Burry declined a request for an interview on Wednesday, and calls to Deloitte's representatives were not returned.
In one report, Deloitte wrote that the damage to the slipway and the resulting cancellation of the contract to refit the MV Gallipoli was one of three events that "significantly impacted the financial position of the company."
The provincial government defended the move, and Transportation and Works Minister Steve Crocker said the provincial government paid Burry's more than was originally promised because of change orders.
Another factor Deloitte identified was a $500,000 writeoff the company saw in November 2016, after it stopped an effort to buy the Marystown Shipyard — but not before starting what the report called a "due dillgence process." Deloitte also pointed fingers at Bond Sea Transportation, which it says didn't pay for work in May 2017.
Russell says there wasn't much the Town of Clarenville could do in the bankruptcy process, other than watch it play out.
He says he hopes a major buyer will come in to keep the shipyard alive.
"I don't know how realistic and how attainable that is," he said.
"I would think … given the number of vessels that are in operation in the province, that there would be a need for maintenance on these vessels … so that there would be ample business to keep an operation like that viable."
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