More than six years after PricewaterhouseCoopers Inc. (PWC) was appointed as trustee in the bankruptcy proceedings for 439288 B.C. Ltd. and Area Finance Inc., investors will finally receive some of their investments back.
“We advise all interested parties that the trustee is in the final stages of completing the bankruptcy administration for 439288 BC Ltd. and Area Finance Inc.,” says a PWC press release issued July 20. “Both estates have a cash surplus after costs, and therefore we will be proceeding to a second and final dividend for Area Finance Inc. creditors/investors, and a one time final dividend for 439288 BC Ltd. creditors/investors.”
While the total investors’ claim totals $38,083,492, the amount that they will receive is $513,504, approximately one cent per dollar of claim.
According to PWC, the exact amount of individual payments, and the date of distribution, is not yet known.
“Generally speaking, this process can take anywhere from an estimated six to 12 weeks,” says the PWC press release.
“Once we have court approval to disburse all remaining funds in our possession, the final distribution will be completed, and PWC will be discharged as trustee.”
Carl Glenn Anderson and Douglas Victor Montaldi were the directors and sole shareholders of 439288 B.C. Ltd., a company that made loans to individuals and small businesses primarily in the Burns Lake area. The company raised the capital necessary for its lending activities by selling promissory notes to investors.
In 2002, they were investigated due to suspected fraud. The Financial Institution Commission (FICOM) investigated allegations that the company operated as an unregulated deposit-taking institution and owed $41-million to creditors. Later that year, FICOM obtained a financial freeze order and issued a cease-and-desist order against the numbered company which effectively banned any further conduct of the company’s business.
In 2003, the B.C. Securities Commission ruled that the two directors defrauded investors when they failed to disclose the company’s true state of affairs in selling the securities and wrongly used new investors’ money to pay off existing investors.
“Investors were told essentially nothing about the state of [the company’s] affairs,” said the panel.
PWC was appointed trustee after the company acknowledged on May 9, 2002 that it was insolvent. The FICOM freeze order was lifted upon the appointment of the trustee.
Since then, creditors - who consist primary of the company’s investors - have accepted a company proposal to reorganize its operations into two units including the numbered company.