At least 65 Central Alberta businesses are owed money by the financially troubled Medican group of companies, which last Friday received an extension of its court-ordered protection.
Medicine Hat-based Medican had on May 26 been granted an order under the Companies’ Creditors Arrangement Act preventing creditors from taking action while it seeks to restructure its operations.
That order, which applies to more than three dozen companies under the Medican umbrella, has now been extended to Aug. 12.
A May 31 report filed in connection with Medican’s application for the extension listed debts of nearly $140 million, with almost $30 million of these unsecured.
The approximately 800 unsecured creditors identified included Bruin’s Plumbing & Heating Ltd. of Red Deer, which was owed just over $1 million, Westridge Cabinets of Red Deer County ($374,000), Structural Building Systems of Red Deer ($225,000), Q2 Electrical Contractors of Red Deer ($265,000), Wolf Creek Building Supplies of Lacombe ($160,000), Border Paving Ltd. of Red Deer ($156,000), Carpet Colour Centre of Red Deer ($138,000) and Goodmen Roofing Ltd. of Red Deer ($107,000).
The court also heard that Medican has received an offer to buy nine of its development projects, with these including the Sierras of Michener Hill: a three-building 156-unit condominium complex and nearby 38-unit duplex community that Medican is building in Red Deer.
Medican is currently involved in more than 30 projects. Some of these it is developing itself and others it is building on a contract basis for others.
In addition to Sierras of Michener Hill, Medican is building or has plans to build several condominiums in Sylvan Lake.
The court was told that since CCAA protection was granted, Medican has terminated 21 of its 128 employees and cut other costs, and is assessing all of its projects.
An affidavit filed by founder Wes Reinheller in support of the original application said the business was hurt by cost overruns, a decline in the real estate market, high financing costs and poor management decisions after he and his wife Janice stepped back from the business.
Medican was started in 1974 as a concrete company, and later branched into residential construction. It has since constructed more than 10,000 homes in Western Canada.