Aboriginal Logging Ltd. of Peace River declared bankruptcy last month, leaving many unpaid creditors and unanswered questions.
‘Where did all the money go?’ is probably the biggest question haunting the dozens of companies and individuals left holding the bag. Where did the money from the logs go and what is the relationship between the contractor and sub-contractor?
Those are questions the bankruptcy officer will have to answer as the process goes through the courts. In the end, the creditors will get some of their money back, but it likely won’t be as much as 50 cents on the dollar.
“It could be as little as three cents,” says Al Anderson, Credit Manager for Brandt Tractor.
Brandt Tractor is the biggest of the creditors in the case. The John Deere equipment supplier is out $315,000 for a couple of months rental charges, plus parts and service on three pieces of logging machinery. There are numerous others, including Max Fuel Distributors of Red Earth, to the tune of several thousand dollars. Wage earners like Peter Giroux of Canyon Creek don’t expect to get Dime One for their efforts.
“I won’t get any money, not from those guys,” says Giroux, who says he’s owed “a lot more” than the $141 listed on the bankruptcy statement. Max Fuel Distributors says the same thing, but is submitting a claim for the full amount.
Lavoie Holdings of Red Earth is another creditor that expects nothing good to come out of the bankruptcy proceedings.
“We might get 10 cents on the dollar,” says Linda Lavoie, whose company did some hauling for Aboriginal Logging. “We’re not even going to submit a claim.”
Aboriginal Logging Ltd. (ALL) is a company owned by the Whitefish First Nation and two other parties. They had a contract with Whitefish Logging – owned by the Whitefish First Nation. Whitefish Logging was contracted to supply logs to the Seehta Forest Products mill north of Red Earth, in which the Keetaskeenow Tribal Council has a 50 per cent interest. The Whitefish First Nation is one of three First Nations that make up the tribal council, along with Loon River and Woodland Cree.
Whitefish Logging hired Aboriginal Logging to cut timber on the Seehta contract last winter, but for some reason things didn’t go well.
“It wasn’t a banner operation up there this winter,” says Alberta Plywood Woodlands Manager Gordon Sanders, perhaps understating it a bit. Alberta Plywood’s parent company, West Fraser, owns 50 per cent of Seehta and manages the mill and its timber quota holdings.
In fact things were going so badly for Aboriginal Logging that another contractor had to be hired to complete the job. Eventually most of the logs that Whitefish Logging had contracted to supply the mill were delivered, Sanders says.
In the meantime, though, the wheels were coming off the Aboriginal Logging wagon. Employee turnover was high and ALL just wasn’t getting the job done. They weren’t paying their bills either, and then in early April the bad news went out in the form of a declaration of bankruptcy.
It was a rude shock and a hard lesson for companies like Max Fuel Distributors. Max Fuel Controller George Schell says he did a credit check on Aboriginal Logging last fall and found they were behind in payments to a Petro Canada dealer in Grande Prairie. On that basis Max Fuel turned down the fuel deal, but then changed their minds and decided it was worth the risk. It turned out to be a big mistake.
Max Fuel started delivering fuel – lots of it – to Aboriginal Logging in late January and never got paid for it. Schell says when the February bill came due he tried setting up a meeting with Aboriginal Logging management, but found it difficult to get phone calls returned. Meanwhile, fuel deliveries continued until the bankruptcy notice put an end to everything.
Schell suspects – as do other creditors – that Aboriginal Logging knew what was coming well before it happened. And yet they allowed the debts to continue to accumulate. There are hard feelings over that.
“I’m very angry,” says Lavoie.
There are hard feelings on the other side of the balance sheet too. The bankruptcy statement lists liabilities and assets. The assets include nearly $123,000 owed to Aboriginal Logging. Included in that amount is $20,900 owed by Loon River Contracting, a company owned by the Loon River First Nation. Whitefish Logging is listed as owing $38,000 and KTC Logging $57,000.
In at least one case, collecting is going to be difficult if not impossible. Loon River band manager Brian Pitcairn says Loon River Contracting already paid the bill Aboriginal Logging says it hasn’t collected.
“That claim represents money for work done two years ago,” says Pitcairn. “We hired Whitefish Logging to do it and we paid them for it.”
Pitcairn says he thought that was the end of it until last fall when Aboriginal Logging informed LR Contracting that the equipment that did the work actually belonged to Aboriginal Logging and therefore the money was owed to that company.
Pitcairn says it was difficult to tell the difference between Whitefish Logging and Aboriginal Logging since they both had the same manager and operated out of the same office. As far as he knew, LRC was doing business with Whitefish Logging, and “it wasn’t our responsibility to determine whose equipment was out there.
“We’re not paying twice,” says Pitcairn.
The relationship between the two companies – Aboriginal Logging and Whitefish Logging – is of particular interest in the bankruptcy case, and it is complicated by how close they seem to be to each other. They are apparently legally distinct, but to many of the creditors in the case, it’s a distinction without much of a difference. In any case, big creditors like Brandt Tractor are counting on finding out how the money for the logging contract flowed between the two. It may be key to establishing what the assets of the bankrupt party really are.
To help its case, Brandt has applied for a ‘woodsman’s lien’ on the logs delivered to the mill under the Whitefish Logging contract. It means Seehta is unable to saw the logs and even risks losing the ones it has already paid for. In what Sanders calls a “worst-case scenario” the woodsman’s lien could result in a sheriff seizing the wood and selling it.
Seehta therefore opposes the lien.
“It’s quite frustrating,” Sanders says. “We could end up being liable for the actions of a company we had no direct relationship with.”
As far as Brandt Tractor is concerned, the lien is a necessary tool in recouping as much of their money as possible. Anderson says his company is also hoping the lien will help clarify what money was paid for what wood “and how it was disbursed.”
Max Fuel – among others – is interested in seeing what the process turns up.
“What happened to all the money?” says Schell. “They had to cut a lot of logs. My guess is close to a million dollars worth.”
A million dollars is just about how much Aboriginal Logging owes, according to the bankruptcy statement. To be exact, the figure is $1,061,290.89, although two of the four creditors who spoke to The Leader said their receivables figure is higher than the statement shows.
As to what happened to send things off the rails, perhaps only Aboriginal Logging Ltd. can answer that question. Calls to their number in Peace River last week went unanswered.
It’s all very unfortunate, Sanders says. Part of the reason West Fraser got into the Seehta project with its Keetaskeenow partners was to provide economic growth and employment opportunities in the Aboriginal communities of the region. The bankruptcy of Aboriginal Logging Ltd. won’t help that goal at all.
“We’re quite anxious that it all gets resolved as soon as possible,” Sanders says.

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