No refunds for customers owed $2.5M in bankruptcy of N.S. home heating oil firm
CBC
A Nova Scotia home heating fuel company that's gone out of business owes $2.5 million to customers who prepaid for their furnace oil, according to bankruptcy records, but none of them will be issued refunds.
Maritime Fuels, which served thousands of homes and businesses in Nova Scotia and New Brunswick, filed for bankruptcy last week and abruptly stopped deliveries.
Newly posted records show the company owes more than $51 million, but has assets of just $7.9 million, suggesting customers and other unsecured creditors have little hope of getting their money back through the bankruptcy process.
On Tuesday, customers were sent notices from the bankruptcy trustee, PricewaterhouseCoopers Inc., indicating they would not receive refunds, and instead advising them to file a claim and be added to the list of unsecured creditors.
Percy Best, a 77-year-old retiree in Sackville, N.B., said he was on a prepayment plan with Maritime Fuels that saw him pay $245 a month. His last fill up was in late spring. He figures he's out roughly $1,500, and will have to dip into his retirement savings.
He said he doesn't understand how the company was "doing nothing but pulling money in" over the summer and fall, and then turned around and went bankrupt right when winter fuel deliveries were beginning.
"Where could the money possibly disappear to? Mid-air? Or in a bank account somewhere? It just can't disappear," Best said. "It's very mysterious."
While bankruptcy records indicate prepayment customers are owed a total of $2.5 million, they do not break down the number of customers.
Maritime Fuels owes $25 million to the Bank of Nova Scotia, which is the largest secured creditor. Prepayment customers and dozens of other businesses listed as unsecured creditors will only receive funds if there is money left over after secured creditors are paid.
But the $7.9 million in assets, including property, vehicles, equipment and accounts receivable, are meagre compared to the company's $51.7 million in liabilities.
Maritime Fuels's unsecured creditors include a number of small businesses, such as a Halifax heating contractor that's owed nearly $540,000.
The largest unsecured creditor is Western Petroleum, a Newfoundland company controlled by Ivan Cassell, the president of Maritime Fuels. It is owed $20 million, according to bankruptcy records.
Documents filed in a separate civil case last month claim Western Petroleum loaned Maritime Fuels the money because it believed the company was in good financial health after an accounting firm reviewed and signed off on financial statements showing it was making a profit.
The statement of claim filed by Maritime Fuels against the accounting firm, Baker Tilly Nova Scotia, alleges another firm later determined the company had instead suffered a $9.5-million shortfall in 2020.
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