Hey there, time traveller!
This article was published 27/11/2013 (941 days ago), so information in it may no longer be current.
UNLIKE Toronto City Council, which couldn't get rid of its apparently out-of-control mayor (just cut the legs out from under him), the shareholders of Tribal Councils Investment Group did accomplish the ouster of its former CEO.
Some individuals associated with those shareholders -- the seven tribal councils of Manitoba -- voiced their understanding the hard part was yet to come. But it seems they probably did not heed the old adage to be careful what they wish for.
Since the election of a new board and the termination of much of the senior management from the $100 million per year aboriginal-owned-corporation more than six months ago, the organization has struggled.
Senior management positions have not been filled and two of the most active members of the new board have since departed. Former TCIG chairman Glen Hudson, chief of Peguis First Nation, left the board for personal reasons at least partially related to his workload at his home band. David Meeches, former chief of Long Plain First Nation, was forced to resign from the board after he lost his position as chief of his band.
Meanwhile, a monitor of sorts -- professional services firm Lazer Grant -- was called in near the end of May to engage in a restructuring process. It remains an open file.
Joel Lazer, principal of the firm, has not been available for an interview for a number of weeks, but several sources have confirmed a key element of the restructuring was to be identification of an alternate source of financing.
But that new funding source has not yet been found.
A finance industry official familiar with TCIG's issues said some of the companies are suffering from a dynamic that is often inflicted on companies thought to be struggling -- its customers have stopped paying their bills.
"It is kind of a symptom -- everyone knows they are in trouble... 'maybe we can get away with not paying our bills' -- that invariably is what happens with a company like that," he said, specifically referring to the TCIG-owned Precambrian Wholesale Ltd. "They are definitely challenged by AR (accounts receivables), and because of the cash flow issue, they are cut off from all their vendors so they can't order product. The warehouse is empty, they can't service orders. They are in tough."
But the lender has not placed the company into receivership or made a claim on its security.
Since the restructuring began after a new board terminated management in the spring -- four of those former executives have filed wrongful dismissal suits -- Job 1 seemed to be to shore up TCIG's balance sheet by finding a lender to take out the secure lender, RBC, that, several sources said, had become skittish.
Hudson said it's his understanding finding new debt financing is crucial.
He said since he left the board, he has not been briefed on what, if any, progress has been made.
He said his departure from the board was prompted by personal issues, as well as a heavy workload at his Peguis home base, including its own investment and development activities.
But Hudson said he has heard the reports of struggling operating entities.
TCIG owns a number of Manitoba companies, many of them servicing a First Nation client base, including Arctic Beverages, the Pepsi distributor for much of northern Canada, Precambrian Wholesale, as well as investments in other Manitoba companies.
According to several accounts, the crisis at the headquarters has percolated down into the operations. One employee, who spoke on condition neither his name nor workplace be identified, said, "No one has had the decency to talk to any of the employees at any of the companies about where we stand."
Late last year and into 2013, three of the seven owners of TCIG filed legal action against the corporation, each claiming, among other things, the company was carrying out business "in a manner that unfairly disregards" the interests of the stakeholders.
That culminated in the election of a new board of directors, which ousted management it claimed was incurring unnecessary expenses and refusing to disclose crucial information to shareholders.