Peguis loan debt discussions ongoing: chief

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This article was published 27/03/2023 (924 days ago), so information in it may no longer be current.

A move to write-down almost $170 million in debt to only $25 million isn’t locked in stone, according to Peguis First Nation leaders — despite it being included in audited financial statements.

In a letter to band members, posted on the community’s website March 24, Chief Glenn Hudson and councillors say they are directing the Manitoba First Nation’s lawyer to talk to PricewaterhouseCoopers Inc., in order to resolve a multimillion-dollar dispute about loans owed to Bridging Finance Inc.

“We instruct TDS (Thompson Dorfman Sweatman LLP) to work with PricewaterhouseCoopers to see a resolution of the BFI indebtedness that is satisfactory to both the BFI shareholders and the PFN (Peguis First Nation) community, as a whole,” the letter says.

“We request that you take appropriate steps to find a resolution and to agree upon a mediation process that suits the requirements of the issues at hand.”

The letter also says, despite the chief and council voting to unilaterally write-down the loan and debt to only $25 million (something that only became public upon the release of an auditor’s report earlier this month) the issue isn’t finalized.

“PFN has no preconceived notions with respect to this matter,” it says. “The band council resolution, which speaks to the BFI indebtedness, as of March 31, 2022, was not a final offer of PFN. This (resolution) was executed prior to the discussions engaged in between the parties in 2022 which, in our view, were productive.

“We have no desire to enter into protracted litigation.”

PWC was appointed the receiver and manager of Bridging after the company collapsed in 2021, following an Ontario Securities Commission investigation.

Late in December, PWC launched a lawsuit against Peguis, seeking payment on almost $170 million in loans and interest owed to Bridging.

On Monday, Hudson said the band and council still have not been served with the lawsuit by PWC.

As to whether the writedown amount could be changed, Hudson said: “Yes… (because of) previous negotiations and co-operation between both parties… We will be discussing with PWC.”

The money was originally borrowed from the Bank of Montreal to, among other things, build 50 new on-reserve houses, as well as fund Peguis development on land next to the RCMP headquarters on Portage Avenue in Winnipeg.

Under the Indian Act, creditors can only take legal action to seize on-reserve property if the First Nation has waived that right when taking out the loan.

A Globe and Mail article last week said the band believes the writedown is legal because, when the loan was moved over to Bridging, that company didn’t ask for the same waiver from Peguis.

The issue comes just before community members begin voting for a new chief and council for the First Nation, located some 190 kilometres north of Winnipeg.

Advance voting begins Tuesday in Peguis, Thursday in Winnipeg, and March 31 in Selkirk; election day is April 6 in Peguis.

kevin.rollason@freepress.mb.ca