SOMBA K'E/YELLOWKNIFE
Quick expansion of Chef Pierre LePage's enterprise and an untimely downturn in the economy are what fell the Yellowknife culinary empire, leaving creditors and government-backed lenders without payment, according to court documents.
On April 8, a representative of Chef Pierre LePage's numbered company informed the Business Development Bank of Canada (BDC) that the business was insolvent, had ceased operating at the 49 Street Le Frolic Bistro and Bar building and would not be making any further payments on the mortgage held by BDC for the property, while still owing $319,871, according to a statement of claim filed at the Supreme Court of the Northwest Territories. - NNSL file photo |
LePage, the president and sole shareholder of 994486 NWT Ltd., the numbered company which operated Le Frolic Bistro and Bar, Le Stock Pot Deli and Bakery, and Chef Pierre's Catering and Rental Service, ceased operations of the downtown businesses last month.
The Business Development Bank of Canada (BDC), one of some 70 creditors, is demanding payment in full of a $400,000 mortgage taken on the 49 Street Le Frolic building in 2007, according to documents filed at the Supreme Court of the Northwest Territories.
On April 8, the date when the BDC was informed the company had ceased operating from the mortgaged premises and would be making no further payments, the company owed $319,871.68 in interest and principle on the mortgage.
According to a Bankruptcy and Insolvency Act proposal approved by the Supreme Court on June 24, 2011, the company had racked up liabilities totalling $3,174,807, after a failed bid to expand operations with Nico's Market, a nearly 8,000-square-foot grocery store which opened and closed in 2010, at the Centre Ice Plaza strip mall on Range Lake Road.
Liabilities included around $1.5 million in secured debt to the NWT Business Development and Investment Corporation (BDIC), an agent of the GNWT responsible to the minister of Industry, Tourism, Investment.
At the time, costs across all the company's operations, which included Le Frolic, Chef Pierre Catering, Le Bush Pilot Cafe, Wildcat Cafe, Le Stock Pot, and Nico's Market, were as high as $519,563 in one month, plus secured debt payments to BDIC of $20,041 per month. Expenses included cost of goods, general and administration expenses. The company's payroll expenses alone were almost $200,000 monthly.
The company rarely broke even as sales across the businesses ranged from just under $370,000 in the slowest month, January 2011, up to $566,800 in December 2010, during the period from September 2010 to July 2011.
"Nico's Market was losing too much money," stated a sworn affidavit signed by LePage, explaining why the company could not lease the premises from landlord Polar Developments Ltd., after the landlord bought the property from LePage's company under testy asset negotiations in 2010.
Additional expenses, including construction costs, increased inventory and higher plant and equipment costs due to the company's expansion, are among the factors listed in the court documents as to why the company was in financial difficulties and no longer able to meet its obligations to creditors as they became due.
"The economy also entered into a downturn, which resulted in loss of revenues for the ongoing concerns," stated the bankruptcy and insolvency proposal document.
Operations at Le Frolic, Le Stock Pot and the catering company continued after a writ of seizure and sale of the company's assets, including the Frolic building owned by the company, was issued at the sheriff's office in summer 2012, to help collect money owed to the Canada Revenue Agency.
Yellowknifer was not able to get a hold of LePage for comment.
On April 10, the court gave BDC authorization to enter the Frolic building to preserve the property.
