Area farmers bilked out of millions of dollars in the Pigeon King breeding scheme will recover very little, if any, of that money.
Some of the company’s creditors received letters last week from BDO Canada informing them that the liquidation of assets owned by Pigeon King International (PKI) and its founder Arlan Galbraith is now complete.
BDO, the firm in charge of PKI bankruptcy proceedings, sold Galbraith’s home in Cochrane for $225,000, and obtained another $213,000 through the liquidation of his investments, vehicles and other possessions.
After paying professional, administrative and other fees, all that’s left is about $130,000 for hundreds of remaining creditors – but only 70 of those will receive anything at all.
Some creditors that invested tens or hundreds of thousands of dollars are expected to receive a few hundred dollars.
“The potential dollar value of those claims is in excess of $71,000,000 and 350 creditors. Clearly, without adopting a practical approach to those claims, the $132,000 will provide little recovery for the 350 creditors,” states the creditor notice from BDO Canada.
The letter goes on to say, “It was fairer to give priority to the claims of creditors who had actual, quantifiable losses at the date of bankruptcy.”
Those with “liquidated losses” include 100 creditors claiming approximately $3 million. BDO says the amount claimed for future losses were excluded from distribution.
PKI, which employed about 50 people and had offices in Moorefield and Waterloo, declared bankruptcy in 2008, leaving hundreds of thousands of pigeons in limbo (the province eventually spent at least $100,000 for the gassing of about 175,000 pigeons) and some investors wondering if they would lose their farms.
In 2010 Galbraith was charged with fraud. Three years later, following a trial in which he represented himself against the advice of the judge, Galbraith was found guilty and sentenced to seven years in prison.
BDO documents list 168 Canadian PKI pigeon breeders, including at least 15 in Wellington County, and 303 American breeders. Also located within Wellington County were seven of 12 Canadian barns rented by PKI, as well as the homes of at least 12 of the listed 16 company employees.
The documents show total PKI liabilities based in Wellington (for breeders and rented barns) totalled over $1.3-million. But Galbraith operated the business as a sole proprietor until 2007, so the list of total breeders and landlords in Wellington County could be much larger.
BDO Canada has recommended farmers and breeders should receive more by way of dividend than the institutional creditors, suggesting a 75-25 per cent split. The 70 farmers/breeders expected to receive something collectively filed for $464,980 in losses but will only receive $89,423.
One Mapleton Township creditor testified in court in 2013 that she and her husband got a $125,000 loan in 2005 to buy PKI breeding pigeons and to renovate a barn on their farm. When PKI collapsed the couple still owed about $86,000 and was left with 3,000 pigeons. They will receive less than $600 if the distribution is approved.
The BDO plan laid out in last week’s letters must be approved by creditors at a meeting on Dec. 16 in Kitchener.
