Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Wakefield Construction Bankrupt
01-23-2015, 07:17 PM, (This post was last modified: 01-23-2015, 08:20 PM by Skook.)
#1
Wakefield Construction Bankrupt
Here’s how news broke on the Sunshine Coast this past Wednesday...

Quote:Wakefield Construction bankruptcy ‘a great loss’
Rik Jespersen, The Local Weekly, Sechelt. January 21, 2015.

The local construction industry has been rocked by the financial collapse of Wakefield Construction, one of the Sunshine Coast’s biggest and most prolific building companies.

[Image: attachment.php?aid=1046]

Word leaked out Jan. 9 that Wakefield had suddenly terminated dozens of employees, most of them on the Coast. A search of bankruptcy records at Industry Canada showed that Wakefield Construction Inc. had filed a Notice of Intention, also on Jan. 9.
None of the several employees of the company that the Local Weekly has tried to contact has responded to requests for comments or interviews, including company president and founder, Lance Sparling. It’s believed the bankruptcy leaves a number of major creditors with unpaid bills, including the Coast’s building supply companies, who also have declined comment.

Kim Darwin, president of the Sechelt and District Chamber of Commerce, said Wakefield’s closure, “will be a great loss to the community.” “The impact will surely be felt through the trickledown effect to sub-contractors, construction supply outlets and other local businesses. We sincerely hope that our other local construction companies will be in a position to fill some of the void that will be left as Wakefield exits the local construction scene,” Darwin said.

Sparling started in 1999 with construction of The Embers, a lodge on Thormanby Island. He then formed Wakefield Homes in 2004, which built a 46-home, seven-acre development on the highway in West Sechelt, which was followed by a string of custom home and commercial projects, including the Watermark condominiums in downtown Sechelt. The company opened a marine services division, and in 2012, expanded to the Lower Mainland with the opening of an office in West Vancouver to service the Sea to Sky Corridor. It opened another office in Vancouver in 2013.

I’ve been posting stories about real estate and development on the Sunshine Coast for almost two years now. During this period, I’ve often wondered about the Sunshine Coast Credit Union’s exposure since 2007 when the SC real estate market collapsed. There were so many projects already underway or in the pipeline (land bought, architects hired, plans drawn, hearings over, rezoning obtained, development fees paid) that had to forge ahead regardless; and, all impacted by seven years of virtually no buyers.

So, Wakefield has listed 10 “Secured” creditors in its bankruptcy papers and all together they're owed $459,099 and change. The SCCU’s portion of that is...$300,000. Now, those 10 creditors are first in line for any monies obtained when and if Wakefield can liquidate any and all of its assets. But, are there any assets? Isn’t this is the kind of business that likely leases its office(s), vehicles and equipment? As for that equipment, wouldn’t the vast majority of it be supplied or owned by the subcontractors, anyways?

Subcontractors...aye, there’s the rub. They play such a pivotal role in the home construction industry and thus there are so many of them tossed into Wakefield’s pile of 425 “Unsecured” creditors owed a total of $6,028,189 and 69 cents. They join the whole chain of small and medium size enterprises that keep a company such as Wakefield’s in business from the local newspapers (The Local Weekly is owed $2,940), to copy centres, water taxis, cell phone companies, accountants, and the building supply centres that brought in the lumber, drywall, windows, nails, screws, etc., etc. to the tune of $184,579.82 for one SC supplier alone (Wakefield hit them all on the SC).

Now, Wakefield just wasn’t building on the Sunshine Coast. According to its own website,...

Quote:From Whistler to the Sunshine Coast to the North Shore, Bowen Island, Vancouver, Burnaby and beyond, we build in communities throughout the Lower Mainland and BC.

Yes, Wakefield certainly spread the pain around – all throughout the lower mainland; up to Squamish and Whistler; and over to Bowen Island. Lordy, you should see what is owed to those poor BI businesses and subcontractors; it’ll make you weep. Do you want to see how much pain was spread around? You bet – as they say in the media biz, “No news is good news”. Here you go: Boale, Wood & Company Ltd, Bankruptcy Trustee & Insolvency Consultants. You want to check out the 21 page .pdf “Notice to Creditors of Filing of NOI”.

I think the writing was on the wall back in January 2013 when Wakefield announced that two new partners and been added, that a new growth strategy was launched, and that a Vancouver West office had been opened to join the other two already in existence.

[Image: attachment.php?aid=1047]

Wakefield only had two choices: expand or contract. It went with the first and the rest is history; well, it’s history now, too.

I wonder if Wakefield put a low-bid offer in to get that Watermark contract back in May, 2011. The company had never constructed a complex that size working solely with concrete and it might have severely underestimated the time (the project was behind the stated opening schedule) and that alone would have impacted costs or perhaps kicked in a penalty clause. Well, we’ll never know; but, in either case, it could well lie at the heart of this week’s announcement.

There are no winners in this situation – not the employees, not the subcontractors, not the local businesses nor suppliers, not the community and not Lance Sparling. As the list of “Unsecured” creditors shows, he borrowed from himself, too, to keep the ball rolling. His waterfront home was put on the market a year ago and remains unsold despite a -25% drop in the list price; but, as we know those million dollar plus properties have been slow to move on the Sunshine Coast – only 17 sold in 2014 out of a total of 123 listed – that’s barely 14%. Sparling will be starting over again, too. I wonder if it will be on the SC.

Like so many others living in and north of Sechelt I wondered what would replace the old “Wake-in-the-Field” Inn and then was fascinated by those uniquely curved roofs of that replacement – the Wakefield Beach development. When I moved down to Sechelt, I had the opportunity to walk through the project and it is a very special and attractive development. The company, Wakefield Construction, was born from that development and at least in this instance the company name lives on.

Finally, I’m not sure how long the Wakefield website will stay up online; so, just in case it is pulled like all Wakefield’s social media sites (only the LinkedIn link works) here is a screen capture for posterity.

[Image: attachment.php?aid=1048]

(Yes, that is a Chinese flag up there in the right corner. Clicking on it converts the site to Chinese characters which likely works whether you speak Mandarin or Cantonese. How much impact did that have?)

After completing the above, I decided to pay a last minute visit to the Bowen Island Undercurrent website and here is its news story on Wakefield:

Quote:On Friday, January 9th, Bowen Islanders working for Wakefield Construction Inc. were informed that their employer was headed for receivership. On Tuesday of this week, a formal bankruptcy hearing was held, according to insolvency consultants Boale, Wood & Company. Also this week, the same company released a list of all the outstanding debts owed by Wakefield Construction.

In total, the company owes more than $6 million. On Bowen, Wakefield Construction owes more than $400,000. Among the Bowen Island companies owed money are Artisan Office Services, Black Bear Transport, Blomberg Building Group, Bowen Bay Plumbing and Heating, and the Bowen Building Centre.

The letter that accompanies the list of creditors explains that Wakefield is required to formulate and file a “Proposal” to its creditors within 30 days or apply to Court to extend that period. In the “Notice of Intention” (to make a proposal) “no creditor shall have any remedy against the debtor or his property or shall commence or continue any action, execution or other proceedings for the recovery of a claim.”

Employees are also owed money for the final pay period prior to January 9th. According to a letter sent by Boale, Wood & Company, these employees are entitled to the federal Wage Earner Protection Program, which will re-imburse them with up to $3,600 in lost wages.

Wow, more than $400,000 owed to that one very small community. Unbelievable.


Attached Files Thumbnail(s)
           
Reply
01-24-2015, 04:11 AM,
#2
RE: Wakefield Construction Bankrupt
Wow! Fascinating! Thanks for sharing.

Just one tiny comment: No winners in this situation? Don't forget the lawyers!

Drinks all around the table for them. Tongue
Reply
01-24-2015, 08:57 AM, (This post was last modified: 01-24-2015, 08:58 AM by JimmyWW.)
#3
RE: Wakefield Construction Bankrupt
Great sleuthing Skook and you will understand that I am shocked by this news given my links to that community. It's awful news and a real blow to the island's economy.

Elsewhere and more widely -- and forgive me for not being more specific - I have now had four conversations with senior figures from Canada's financial community expressing concern over two things: 1. the impact of the AB oil price shock on the wider Canadian economy 2. the margin impact on their mortgage books of business given the BoC's recent rate decision.

I'm sorry to say that I think the news you report here is just the tip of a larger lump of ice floating towards Canada's economy this year.

Jimmy
Reply
02-28-2015, 03:13 PM, (This post was last modified: 02-28-2015, 03:31 PM by RFM.)
#4
RE: Wakefield Construction Bankrupt
I took a look at the updated list of assets and liabilities and distilled this:

Assets

Accounts Receivable (doubtful)..............................................$2,678,950.43
Estimated to produce.............................................................1,000,000.00
Machinery, equipment and plant....................................................5,000.00
Real property or immovable......................................................500,000.00
Furniture......................................................................................3,000.00
Vehicles....................................................................................196,000.00
Other........................................................................................100,001.00
TOTAL..................................................................................$1,804,001.00

Liabilities

Secured creditors..................................................................$1,653,170.75
Unsecured creditors.................................................................8,314,942.38
TOTAL..................................................................................$9,968,113.13

Deficiency............................................................................($8,164,112.13)

In summary, the assets are most likely insufficient to pay the Secured Creditors and costs of administration of the bankruptcy. Unsecured creditors likely to collect nothing.

Secured Creditors:
Sunshine Coast Credit Union...............................................$760,000.00
Robert Bull (Crumpit Bull Mortgage)......................................216,000.00
Crumpit Woods Developments..............................................125,000.00
Crumpit Woods lien claims....................................................159,000.00
Employee wage claims..........................................................196,728.21
Ford Credit (likely some of those vehicles listed as assets)........94,829.44
Jim Pattison (likely the rest of those vehicles listed as assets)..101,613.10


Noteworthy Unsecured Creditors (note items with !):
BA Blacktop (North Vancouver)............................................$124,774.62
Beere Timber (North Vancovuer)...........................................111,797.47
! Bowen Building Center (Bowen Island)................................106,074.48
Bowenshire Stonework (Bowen Island)....................................92,417.14
Caledonia Drywall (Gibsons)....................................................38,482.50
Cantu bathrooms (Vancouver).................................................60,729.09
Cardinal Concrete (Squamish).................................................23,886.43
Central Coast Concrete (Sechelt).............................................22,302.22
CFO Loan (Burnaby)..............................................................120,000.00
Corona Excavation (Whistler)...................................................86,061.29
! Customer Deposits (c/o bankruptcy trustee).......................1,059,071.00
CWC Electrical (Brackendale)...................................................28,022.44
Employee Wage Claims (unspecified - c/o bankruptcy trustee)..219,574.69
Geotility Geothermal (Richmond)............................................129,301.38
! Gibson Building Supplies (Gibson).........................................184,579.82
High Country Landscaping (Whistler)........................................29,502.90
Hub International Insurance (Burnaby).....................................45,449.00
IJ Windows (Kamloops)............................................................33,452.22
JCL Specialized Drywall (Roberts Creek)...................................82,950.00
Kolbe Windows (North Vancouver)...........................................56,374.10
Kuban Electric (Burnaby).........................................................69,910.85
! Lance Sparling (the ‘developer’)(Sechelt)...........................2,000,000.00
Luxe Kitchens (Roberts Creek).................................................27,372.38
Midland Appliance (Surrey)......................................................43,059.14
Mountain Mechanical Contracting (Duncan).............................118,136.25
Nelson Roofing (Cumberland)..................................................82,401.09
Purcell Timber Frames (Nelson)...............................................91,072.07
Quickway Paint (Bowen Island)...............................................50,287.90
RJS Electrical (Sechelt)...........................................................64,173.09
! Rona (Squamish).................................................................40,859.95
! Rona (Whistler)..................................................................114,757.77
! Rona (Sunshine Coast).......................................................119,562.87
Sage Cabinetry (North Vancouver)..........................................36,922.20
Spar Capital (c/o Lance Sparling)...........................................227,983.35
Trident Millwork (Richmond)...................................................59,911.50
True Custom Cabinetry (Sechelt)............................................49,322.79
True North Masonry (Whistler)................................................47,019.85
Twin Island Excavating (Bowen Island)....................................29,998.93
Wespac Electrical (Coquitlam).................................................69,924.90
Yves Potvin (Vancouver) ?.....................................................100,000.00

So, the pain is spread far and wide, but Sechelt and Bowen Island are hard hit by this bankruptcy. Also, you’ve got to wonder, especially concerning some of the local companies, if the ‘account manager, of the Wakefield account, who let the account get so hopelessly behind, is still with the company!
Reply
03-03-2015, 12:21 AM, (This post was last modified: 03-03-2015, 12:27 AM by Bailing in BC.)
#5
RE: Wakefield Construction Bankrupt
Another contractor has gone down in Squamish for almost as much money as Wakefield but for some reason there is not so much as a whisper about it in any of the media. This is not the first time Chris Rommel has gone down I believe. At least one of the creditors from the Rommel bankruptcy is also a creditor of Wakefield, I would image there are more. Will post link to list of creditors.

http://www.csvan.com/corporate/Rommel.%2...ackage.pdf
Reply


Possibly Related Threads...
Thread Author Replies Views Last Post
  Real Estate Investing Sunshine Coast Style: Life's a Wakefield Beach. Skook 5 13,385 02-08-2015, 11:38 AM
Last Post: Skook
  Wakefield Beach doondog 9 11,035 10-20-2013, 11:15 AM
Last Post: Skook

Forum Jump:


Users browsing this thread: 1 Guest(s)

Contact Us | Vancouver Peak | Return to Top | | Lite (Archive) Mode | RSS Syndication