Embattled Six Nations fuel company files for creditor protection
A Six Nations fuel company that recently sued its former CEO for fraud has filed for creditor protection.
On Jan. 30, Original Traders Energy Ltd. was granted protection under the Companies’ Creditor Arrangement Act from a lengthy list of creditors to whom the company owes more than $78 million.
Roughly half that debt — just over $38 million — is owed to the government in provincial and federal gas tax remittance payments, according to court filings.
The multinational company owes another $19.4 million to the Canada Border Services Agency.
“The stay of proceedings was granted to protect OTE Group, their assets and business and the interests of their creditors, and to give the OTE Group breathing room to formulate and implement its restructuring plan and potentially a plan of arrangement for its creditors,” said Paul Van Eyk of accounting firm KPMG — the company’s court-appointed monitor in these proceedings — in a letter to the company’s creditors.
Original Traders Energy imports and blends fuel products that are sold to gas stations in Ontario.
In a statement of claim filed last November, the brothers who run the company — Scott and Miles Hill of Six Nations — allege the former CEO, Glenn Page of Waterdown, and others stole millions of dollars and used company resources to open a chain of discount Indigenous-run gas stations in Ontario and fund a lavish lifestyle of travel and luxury purchases.
The company alleges the misappropriation, discovered after Page’s exit, has left OTE on the hook for millions in unpaid taxes and hefty bills to suppliers and regulators.
“We’re doing our very best to contain the damage and ensure the continued operation of the business,” said Steven Graff of Aird and Berlis LLP, one of the lawyers representing OTE.
Page and the other defendants have denied the allegations, which have not been tested in court.
OTE’s recent legal filings buy the company time to find a path forward, as on Feb. 9 the Superior Court of Ontario declared a “stay period” that suspends any legal action currently underway against OTE and prevents new actions from being undertaken until April 28.
The company has also secured “conditional, time-limited” gas and fuel licenses from the province in order to continue operating until the end of March, with OTE putting up $2 million in cash as security.
“It’s a company that can’t run the risk of suffering an interruption in its operations,” Graff told The Spectator, adding his aim is to ensure the company continues to operate, for the betterment of OTE’s suppliers, customers and approximately 55 employees.
“(OTE) carries on an important function within the Indigenous community (and) has the ability to contribute to the economy generally, so the idea is to try and preserve it as a going-concern operation and avoid the need to shut it down and liquidate it, if possible,” Graff said.
“The CCAA gives us the ability to use one proceeding within which to bring all of the issues surrounding the company together.”
J.P. Antonacci, Local Journalism Initiative Reporter, The Hamilton Spectator