Employees looking for answers after mass layoffs at CHCH

TORONTO — Former staff of CHCH, a Hamilton broadcast institution for more than six decades, are desperate for answers after the company that owns the TV station threw it’s news content provider into bankruptcy on Friday.

“I expected to retire at CHCH News,” said videographer Cindy Csordas, adding that she was not given a warning about the impending cuts and was offered no severance package.

“Just suddenly, ‘You’re gone,’ and ‘No, we can’t afford to give you severance because we’re bankrupt.'”

READ MORE: CHCH cuts up to 100 jobs as employer declares bankruptcy, Friday newscast cancelled

In its federal filing, Channel 11 LP, the company that provides the station’s news content — which is owned by Toronto-based Channel Zero — reported it had less than $60,000 in assets and $4.4 million in debt.

The station also reportedly owed the Canada Revenue Agency more than $40,000 and its employees more than $1.6 million.

CHCH reported Wednesday that employees were separated into two groups and 71 people were offered a new job under a new company and 96 were laid off.

“You can’t do this to hard-working people, just cut them off at the knees,” said Matt Hayes, the longest-serving on air employee with more than 33 years at the station covering news and weather.

“There has to be some legislation in this country to outlaw this kind of activity. It is a shell game, a little sleight of hand.”

Hayes said he’s concerned with the way the bankruptcy happened and the fact that Channel Zero set up a separate entity to operate CHCH News, before pulling the plug on that debt-ridden company and shifting operations to a new company with fewer employees shortly after.

“We bankrupt the company, we change the name, we leave all of these other people twisting in the wind with nothing to show for their years of service, we leave behind a mountain of debt and then we come back the next day and say, ‘Hey we’re back everybody love us again!’

“How can you do that? Especially in this town — this is a union town.”

An email by a Channel Zero sales executive to a client obtained by Global News purportedly showed that this was precisely the intention.

“We just needed to disband the previous company and form a new one where changes could be made free from the old Union employees and their demands,” Kathleen Marks wrote.

“The only change is that this ‘new’ CHCH will allow for Management and our Producers to hire new talent and bring on more daytime programming that will appeal to a wider demographic.”

Chris Fuoco, Vice President of Sales and Marketing at Channel Zero, denied claims that the company was bankrupted intentionally to start fresh.

“That isn’t true,” he said, adding that he did not support the claims made in the email from Marks and that she was not a part of their “senior leadership team.”

Fuoco also said the station was losing money, but it’s parent company Channel Zero — which also runs Bloomberg Canada and several pornography channels — is financially sound.

“This idea of creating companies within companies is becoming more common these days,” said Marvin Ryder, a professor of marketing at the DeGroote School of Business in Hamilton.

“They wanted to contain each unit as much as they could in case one of them got in financial trouble it wouldn’t bring the whole house of cards down.”

WATCH: It was announced Friday that Hamilton television station CHCH would be making dramatic cuts to their news programming, and laying off dozens of employees. As Sean O’Shea reports, former staff members are angry, and questioning about the motives behind the extensive cuts.

Ryder said he wouldn’t be surprised if many employees didn’t realize they were working for a “piece of the company” as opposed to the entire company.

“I don’t want to scare anybody but actually they’re doing this a lot more now in this world of mergers and acquisitions. As you put pieces together you want to take them apart if the necessity arose,” he said.

“I don’t believe Channel Zero set out to bust a union but that has become a collateral effect of this. In the meantime we have people in limbo.”

Channel Zero told Global News that its decision to throw its news division was driven simply by debt, but as a result CHCH News remains in the news industry.

Meanwhile, unsecured creditors — such as the employees who have lost their jobs– are stuck trying to fight to get some form of compensation.