Creditor protection extended for forestry company San Group

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A BC Supreme Court justice has extended creditor protection for San Group, which owns two mills in Port Alberni.

A BC Supreme Court Justice has approved a short extension of creditor protection as a court monitor works with San Group to reorganize its business operations, including those on Vancouver Island.

San Group, based in Langley, has two mills in Port Alberni and faces debts of nearly $200 million, including $107 million owing to the Royal Bank of Canada, $43 million to the Business Development Bank of Canada and $22 million to the province for stumpage fees.In April, San Group’s Acorn mill in Delta was damaged by a significant fire. One claim for $12.1 million has recently been denied by the insurance company. The company is filing two more claims, jointly worth nearly $30 million.

The monitor is also trying to determine why lumber inventories were written down by $20 million this year. Management says it put 24/7 security in place, but the monitor was visiting the site Monday to assess whether that was sufficient.“The state of affairs that come before the court today doesn’t come as a particular surprise to the bank,” said Glen Nesbitt, lawyer for the Royal Bank.

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San Group Files for Creditor Protection, Company Monitored by CourtThe San Group, facing creditor claims totaling over $100 million and a log shortage, has filed for creditor protection and laid off employees. A court-appointed monitor is overseeing the company's restructuring, with the goal of a court-supervised sale process.
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