U.S.-based collection agency demands money back from eight Canadian logging contractors affected by Pope & Talbot's collapse; notice argues company was insolvent for three months before declaring bankruptcy

Pauline Vu

NAKUSP, British Columbia , January 12, 2010 (Arrow Lakes News) – It’s back – or perhaps it never went away.

More than a year after local logging contractors received word from Minister of Forests & Range Pat Bell that a deal had been struck to compensate logging contractors for losses they incurred during the collapse of former TFL 23 license holder Pope & Talbot, contractors have received an unwelcome legal notice.

Documents sent to the contractors by a St. Paul, Minnesota-based legal collection agency is demanding money back from contractors, so that it can be used to pay out other creditors.

Crystal Larder of Mountain Meadow Contracting is one of at least eight contractors in the Arrow Lakes area who received the notices during the final days of 2009.

The notice argues that Pope & Talbot was actually insolvent for a period of about three months before they officially declared bankruptcy, and therefore money paid out to the contractors during the roughly three-month period prior to November 19, 2007 needs to be repaid to the creditors.

For Larder’s family company, this amounts to about $49,000, which she says they cannot afford, especially since contractors lost their Bill 13 harvesting rights during court proceedings in the bankruptcy process.

The Bill 13 contracts guaranteed the contractors a set harvest, and were supposed to be maintained even if the owner of the TFL changed. “Had we maintained our rights, and had the government maintained some control over the tree farm (TFL) and who owned it and how they ran it, we would all still have jobs and we would be able to afford to hire lawyers to deal with this kind of stuff -- we wouldn’t have lost our shirts.” she said.

The legal notices do contain settlement offers, and they also have tight deadlines; pay up around half in the coming weeks or we’ll see you in court.

Larder, who helped organize contractors during the (still ongoing) legal saga following the bankruptcy, says they are not sure what to do at this point. “My dad and I, for Mountain Meadow, we feel that to engage with the U.S. courts, to provide any sort of defence, would kind of put us in a position where we have to accept their verdict,” she told the Arrow Lakes News on Monday. “So, at this point, we’re not doing anything at all, and, you know, some people are hoping that it’s just a desperate grab and that some people will get scared and they’ll pay it and they’ll have some more money out of us, and if we don’t pay it it’ll just go away,” she said.

Although the documents appear to be a hangover from the ongoing, exceedingly complex international court proceedings, Larder says the issue of Bill 13 rights is inextricable from the matter. “We still weren’t compensated for the value of our contracts, [and] people paid for those and many contractors had to borrow money to but those contracts and they’re still paying off those loans.”

Larder said that last she had heard on the Bill 13 issue were in the pages of the Arrow Lakes News in early January of 2009.

Minister of Forests and Range Pat Bell said the ministry had been looking into the issue of Bill 13 contracts. “I’m actually looking at that decision now that stripped Bill 13 rights from those contractors and we’re trying to kind of get a sense, getting a legal opinion in terms of the nature of that decision, whether or not we should be challenging it,” he said. “Bill 13 is very important from the perspective of contractors.” said Bell in the Jan. 7, 2009 issue.

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