Doral International has filed for bankruptcy protection for the second time in two years, according to La Presse. The Quebec-based builder owes about C$5.4m to almost 150 creditors in Quebec, Ontario and the USA.
In spring 2010, current owner Denis Poliseno acquired the company and also the molds of Doral Boats, a separate company located in Ontario, from Irwin Zecha, who had put the company in bankruptcy protection.
In May 2011, Poliseno announced that Doral had obtained financing that would help secure its turnaround. Investissement Québec made a loan of C$2m in May 2011, according to the paper, and other stakeholders added moneys through various funds. Zecha reportedly made a C$1.5m loan to the builder last year.
But on March 19, 2012, Doral laid off about 50 union workers. According to the paper, there are now only a handful of workers in the factory.
Doral had filed another application with Investissement Québec for more financial assistance last fall. But after negotiations fell apart last week, Poliseno instead opted for bankruptcy protection. "Doral has not accepted our offer because the company did not seem able to meet the conditions," Chantal Corbeil, spokesman for the provincial agency, told the paper.
The list of creditors include Investissement Québec, Irwin Zecha's WYE Industries, the Caisse Desjardins de la Vallée du Saint-Maurice (C$800,000), the local development center in Shawinigan (C$150,000), Mauricie Support Fund (C$150,000), the Department of Revenue Quebec (C$150,000), the Customs Agency and Revenue Canada (C$75,000) and Aid Society Community Development Centre-de-la-Mauricie (C$120,000). It also owes about C$50,000 to its workers.
Under Quebec bankruptcy law, the company is protected from its creditors for 30 days, with the possibility of an extension of time if that extension helps recover funds for creditors.
"We were asked to solicit bids to try to find buyers or investors," John Gagnon, a partner at Raymond Chabot Grant Thornton, which was appointed trustee, told the paper. "Over the next three weeks, so we will seek people. We have already identified potential players in this industry. We have discussions and we hope that someone can restart the company."
The builder still has orders for new boats, according to Gagnon. He said that Doral will start filling those orders carefully, but the builder cannot wait too long to deliver new boats. “If you wait too long, you lose the customers,” he told the paper.