Frustration lingers amid window, door group receivership

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This article was published 29/03/2024 (574 days ago), so information in it may no longer be current.

It’s been more than a year since Polar Windows, Accurate Dorwin and four other window and door companies were placed in receivership, leaving customers in limbo despite some having paid sizable deposits.

The former CEO of the companies, Stephen Segal, said this week good-faith efforts are being made to eventually resolve the outstanding work.

Segal said 95 per cent of jobs booked before the February 2023 receivership had either been done or were in the process of getting done.

However, others in the competitive window and door market in Manitoba are not so sure that’s the case. One industry official said there were rumours as recently as last week the companies in question had shut down again.

Also last week, a client in Calgary worried work had still not been done after a $7,000 deposit was made almost a year ago.

Gordon Seier, chairman of Fenestration Manitoba, an association that represents all aspects of the window and door manufacturing industry in the province, said there’s still a lot of lingering frustration as a result of the collapse. (Six operating companies were part of the receivership, including two based in Atlantic Canada.)

“We get a lot of calls from people asking what they should do,” Seier said. “There are enough good window and door manufactures in Manitoba that we refer them to, but, for instance, there is some warranty issues that have not been looked after that we can’t do anything about.”

Meanwhile, late last year, the assets of the companies were sold out of receivership to a Tennessee-based entity called Glass 8 Holdings (not to be confused with Glass 8 Inc., a Winnipeg company on Dugald Road that was one of the six that were part of the receivership).

Glass 8 Holdings has subsequently received a letter of intent from another Tennessee company, Healthcare Integrated Technologies Inc., to acquire Glass 8 Holdings. That transaction has not closed.

Scott M. Boruff, CEO of HITI, said the Knoxville, Tenn.-based company – which had only US$21,769 in revenue for the six months ending Jan. 31 – acquires private companies, invests in them and takes them public.

Although the transaction to acquire the assets of the Winnipeg window and door companies has not been completed, Boruff said he believes they can be revived.

It was just the assets of those insolvent companies that were acquired, but none of the debt obligations, he said. “It’s kind of hard to go out of business if you don’t have debt.”

That may be true, but regardless of debt load, companies that manufacture and install windows need the right workforce to be able to operate — and Seier is doubtful that’s the case anymore with the Accurate group.

“They had a lot of great people, but they don’t anymore,” he said.

Segal said the companies the insolvency monitor has continued to operate have about 50 total employees, although some are on temporary layoff.

Segal, who was an owner before receivership, continues to operate as an officer of the companies — both on behalf of the receivership monitor and the owners of Glass 8 Holdings.

At least one of Segal’s former partners was from Tennessee and is part of the ownership group of Glass 8 Holdings. Boruff said his company has connections with some of the ownership of Glass 8 Holdings.

Most receiverships are complicated and all have distinctive characteristics. This is no exception.

At the end of last year, the court transferred management of the receivership to BDO from Deloitte.

Brent Warga, an insolvency professional that was handling the case for Deloitte now works for BDO and continues to manage the file. He was unavailable for comment.

At the time of the receivership, the companies had outstanding debt of $23 million.

TD Bank was the main secured lender and continues to fund operations.

While there are some in the local industry who are skeptical the operating companies will be successfully restructured under new ownership, Segal said the efforts that have been made (including the asset sale to Glass 8 Holdings) have already achieved a better outcome than had the companies been wound down and liquidated.

martin.cash@freepress.mb.ca