Nova Scotia Supreme Court appoints monitor for SaltWire restructuring
A Nova Scotia Supreme Court judge has brought some short-term stability to a company that owns nearly two dozen newspapers in Atlantic Canada.
SaltWire Network filed for credit protection earlier this week after its largest creditor, Fiera Private Debt, said the media company could not make good on a $32-million loan. SaltWire's overall debts exceed $63 million.
On Wednesday, Justice John Keith ruled KSV Advisory, Fiera's financial adviser, will be appointed monitor for the restructuring of SaltWire.
Keith dismissed SaltWire's application to have Grant Thornton appointed as monitor, calling it "unusual" to have competing applications in a case like this.
It makes more sense to have KSV as monitor since their staff have been working on the file for six months while Thornton only became involved in the situation last week, Keith said.
SaltWire's lawyer, Maurice Chiasson, argued KSV only cares about the economic interests of Fiera, which just wants to collect its debt. Chiasson suggested the lender doesn't care about the company's employees or the communities its newspapers serve.
Jennifer Stam, the lawyer representing Fiera, said going into Wednesday's hearing they wanted to assure the courtroom, the public and SaltWire that it has no intentions of shutting down the company and liquidating its assets.
Keith also ordered that Fiera provide SaltWire $500,000 in interim financial support to help the company survive the next 10 days.
No faith in management
Stam reiterated concerns outlined in court documents that Fiera has lost faith in SaltWire's management.
The management team has "displayed a repeated failure to properly manage" the business, court documents said.
Fiera isn't happy to be in this position with SaltWire, Stam told the courtroom, but the company has only made one-third of its payments to the lender in the last five years, totalling more than $26 million.
SaltWire Network CEO Mark Lever said in an affidavit that he has agreed to step down as part of the restructuring.
Last week, SaltWire was ordered to pay $500,000 as a security bond in connection to a separate legal matter relating to the 2017 purchase by SaltWire of more than two-dozen Transcontinental newspapers.
SaltWire was also recently ordered to pay $70,000 for failing to stay up to date with pension plan payments.
Back in court next week
The ruling on Wednesday only buys Saltwire 10 days as the matter is scheduled to return to Nova Scotia Supreme Court on March 22.
That hearing will focus on creating a plan for a more permanent form of SaltWire's restructuring.
Keith also said the union representing SaltWire and the pension plan should be included as any decisions on restructuring will impact them as well.
Some of SaltWire's daily newspapers include the Chronicle Herald and the Cape Breton Post in Nova Scotia, the Telegram in St. John's and the Guardian in Charlottetown. It also operates weekly newspapers.
