County chooses lesser of two evils by compromising

Ponoka County accepts $160,000 offer from company going through restructuring

Municipalities are not in the habit of forgiving back taxes owed, but sometimes you have to give up something for a return in the future.

That’s pretty much the basis of the decision by Ponoka County council that was made during its meeting on Dec. 13 respecting a request by Quattro Resources, who saw council accept the $160,000 offer.

A delegation from Quattro Michael Bejeman and Justin Sullivan appeared in front of council in a plea to see if the county would accept a deal to slash the amount owed plus eliminate interest and penalties that over the last three years have reached $299,000.

Quattro, whose presence in the county is mainly around Rimbey with oil and gas installations, is presently trying to restructure its finances through the federal Companies’ Creditors Arrangement Act (CCAA) a court approved process by which companies come up with a financial payment plan in order to continue operating and avoid bankruptcy.

During the discussion, Bejeman explained there is essentially no assurance the county would receive any money if the restructuring deal isn’t approved by the court early in the new year.

“There would be a lot more wherewith all to continue operations if the plan is accepted as opposed to selling of assets to a new operator, who we would hope would too strive to do the same,” he said.

“And if this goes ahead, it certainly is not our intention and we have no interest in returning to beg or plead in the future about our taxes. That just isn’t what we feel makes a good corporate citizen.”

He added they are making similar presentations to other creditors, mostly municipalities, in hopes of emerging from this and moving forward with operations and preserving jobs while avoiding having to abandon wells.

“We have really done an exercise, a haircut, to come to a proportional number for each creditor to see just what we could obtain from them in terms of fairness without reneging or asking to be forgiven completely,” Bejeman stated.

“Not one person deserves to loss their job, but some have, and having to orphan hundreds of wells would be deplorable and then the citizens end up paying for it. We need this breathing room, we are on the cusp of reorganization and if the majority don’t accept our plan then we all lose.”

County chief administrative officer Charlie Cutforth told council they don’t have much choice if they want to avoid a situation similar to Waldron Energy, costing the county $1 million after it declared bankruptcy last year.

Council did approve the deal with Reeve Paul McLauchlin stating the county has done its due diligence, that Quattro is so close to going the way Waldron did and that he appreciates the company, who has been a good partner in the county, came and laid out the facts. So, he believes the county needs to support them.

Meanwhile, councillor Bryce Liddle said this option is far better than getting zero, a sentiment echoed by the other councillors.

 

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