Bottom falls out of roofing company Mounting debts, death of owner lead to closure of Chateau Roofing and Siding
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Hey there, time traveller!
This article was published 08/04/2019 (1517 days ago), so information in it may no longer be current.
Chateau Roofing and Siding, one of the city’s best-known roofers, shut its doors last month and is out of business.
Although plenty of rumours have been circulating among the competitive Manitoba roofing industry, Chateau’s website and telephone system still give no clues to the business’s demise.
However, Jillian Taylor-Mancusi, an official with licensed insolvency trustee, LCTaylor Inc., confirmed that “the company has ceased operating.”
Around 10 Chateau trucks and trailers still sit in front of the company’s Elmwood offices. Neighbours say the equipment has not moved in a few weeks.
While the corporation itself has not filed for bankruptcy or any kind of receivership, the sole director of the company, Paul Beaulieu, has filed for personal bankruptcy protection. But even he says he is not sure what will happen next.
“I don’t even know what is going on at Chateau,” he said.
Beaulieu, who had been nominally running the company since the founder and former president, Gerald Laurin, died suddenly in September 2017, was essentially thrust into the leadership role by that tragedy.
The closure of the business was the end of what sounds like a fairly chaotic year and a half for a company which, in its heyday last decade, was unquestionably a key player in the city’s roofing industry.
After Laurin’s passing, with no real succession plan in place, Beaulieu and other staff members did their best to keep the company operating.
“With Gerry’s passing and all the legal stuff that went into that, we started 2018 with absolutely nothing but creditor debt. No bank loans, nothing. No line of credit, no visa credit. It was essentially a cash business.”–Paul Beaulieu
“With Gerry’s passing and all the legal stuff that went into that, we started 2018 with absolutely nothing but creditor debt. No bank loans, nothing. No line of credit, no visa credit. It was essentially a cash business,” Beaulieu said.
“It was hard operating a business like that. No one would give us a line of credit based on current ownership (Beaulieu, himself), not that there was anything wrong with me but I didn’t have any assets.”
Beaulieu said it became apparent last month there were several unpaid Canada Revenue Agency accounts, including source deductions, GST and corporate tax. As the sole director of the company, Beaulieu would have been on the hook for those liabilities, which is why he filed for personal bankruptcy.
Taylor-Mancusi, who is handling Beaulieu’s bankruptcy, said director liability meant Beaulieu was on the hook for hundreds of thousands of dollars owing to Canada Revenue Agency.
“The company owes more than $280,000 in unpaid source deductions and we don’t know the actual amount of corporate tax or GST. We expect an audit any time,” she said.
By his own account, Beaulieu’s ascension to minority ownership position only a couple of months before Laurin’s passing was a move to assist the company.
But he subsequently became the sole director of the corporation, and while employees did their best to keep things going, significant payables slipped through the cracks.
“It was just all the other intricacies… some things didn’t get done that no one knew about. The only person who was doing it was Gerry,” he said. “There were things that got missed that made it all more difficult.”
George Fraser, executive director of the Manitoba Shingling Contractors Association, said the industry was well aware of the challenges the company faced after Laurin’s passing.
“It was a difficult transition from his death in 2017,” Fraser said. “And the market is very competitive as it is in all areas of construction. And it was understood that the company was not having an easy time of it before he died.”
“The market is very competitive as it is in all areas of construction. And it was understood that the company was not having an easy time of it before he died.”–George Fraser
Taylor-Mancusi said that while there are assets such as trucks and some roofing equipment, nothing is of substantial value and no official disposition of the assets has been established.
“CRA and source deductions have super priority over all the assets and the amount owing to source deductions is greater than the value of the existing assets,” she said.
Industry players say they know there are suppliers who have outstanding accounts with Chateau, but it seems clear that whenever the Canada Revenue Agency finally makes a claim against Chateau, there is not likely to be anything left for those other creditors.
Beaulieu said prior to locking the doors and abandoning the assets, the seven remaining employees were told of the situation. He said one of them even volunteered to be laid off just days prior to the eventual closing.
Surprisingly, considering the financial vulnerability in which the company had been operating, it seems fairly certain that only one or two customers lost deposits on work that was not done — and now never will be done — by Chateau.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Updated on Monday, April 8, 2019 8:16 PM CDT: Fixes typo.