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Johel Brothers restructuring under creditor-protection plan
Johel Brothers Contracting Ltd., a valley excavating-and-development pillar, has filed for creditor protection, owner Dave Johel confirmed Thursday.
“We filed under the Companies’ Creditors Arrangement Act,” he told the News Leader Pictorial, dismissing reports his Lake Cowichan-based firm was bankrupt.
“It’s business as usual. We’re out bidding and going for it,” he said, admitting his company is struggling with tough economic times. “We definitely need some tuning up.”
Mechanics of the CCAA action — through accounting firm PricewaterhouseCoopers, and law firm Borden Ladner Gervais — proactively let Johel Brothers legally reorganize to a firm financial position.
“It puts a stay on everyone so they can’t hound you while you restructure and regroup,” Johel said.
PricewaterhouseCoopers’ website describes the CCAA process as allowing a company to restructure its financial affairs through a formal plan of arrangement.
“The CCAA presents an opportunity for the company to avoid bankruptcy, and allows the creditors to receive some form of payment for amounts owing to them by the company.”
“It’s exactly what (Crofton mill owner) Catalyst went through,” Johel noted of the timber giant’s restructuring, successfully concluded last year, “and it’s basically the same people doing it for us.”
“These guys know all the ins and outs.”
Johel didn’t expect any immediate layoffs among his 75-some staffers.
But he foresaw dire fiscal straights several months ago, crunched his firm’s numbers, then called the restructuring pros who’ve already made suggestions.
“I’m working on some of their recommendations now.”
That advice includes dumping some of Johel Brothers’ idle or surplus trucks and other rigs during an upcoming auction.
The goal is getting Johel’s 32-year-old company out of the hole, and to a “size where it works,” he explained.
He saw the financial fix as necessary medicine for the long-term health of his diversified firm.
“It’s the times we’re in, and you have to restructure; the economy’s not going to change overnight.”
Still, Johel saw light at tunnel’s end.
“When we finish up, it should be be a great little machine we have here, but it needs a tune up.”