Hundreds of small businesses in Alberta, and across the country, are grappling with economic uncertainty after one of the province’s largest home builders was placed in receivership.
Alvarez & Marsal Canada has been named receiver for insolvent ReidBuilt Homes and several subsidiaries by the Court of Queen’s Bench of Alberta.
READ MORE: Alberta’s ReidBuilt Homes falls into receivership
The company’s failure comes as Alberta recovers from an oil price-induced slump that led to concerns about “imbalances around overbuilding,” according to Richard Cho, principal of market analysis for Calgary at Canadian Mortgage and Housing Corp.
A list of creditors shows that Reid-Built Homes Ltd. owes more than $77 million.
READ MORE: Liens piling up as ReidBuilt Homes struggles to pay contractors
Rod Martinez, general manager of High Standard Landscape, said the company has been doing grading, landscaping, fencing and signage work for ReidBuilt for the last nine years.
Martinez said there was never an issue with ReidBuilt until this past summer, when he received an email saying it would take longer to process payables. Then he heard the company went into receivership.
Get breaking National news
“I was obviously concerned because of the amount of money owed,” he said, which is approximately $250,000.
“We have to make some changes in terms of what we’re doing and make some adjustments in terms of the amount of people we have currently working for us,” Martinez said, adding the company laid off five full-time positions.
ReidBuilt made up roughly 40 per cent of High Standard Landscape’s business. Now, Martinez said the company is taking on more work from other clients to offset that void.
READ MORE: CMHC voices ‘growing concern’ about overbuilding of homes in Edmonton
It is a similar story for All Complete Excavating, which has been doing business with ReidBuilt for more than a decade.
Office manager Charlene Hooper said at least 35 per cent of the company’s business is with ReidBuilt and there was no sign of instability until this past summer.
“For 13 years, on the 31st of every month, I pick up a cheque at 1 o’clock on the last day of month. There was no cheque ready,” she said.
“I called them and they said, ‘We’ll have something for you within a couple weeks and that we’re just changing banks.'”
But by September, Hooper said she still had not received any payment so a lien was placed on ReidBuilt.
“We had absolutely no reason to doubt that there would be a problem, that we would get paid. That is, until the rumours started flying among the trades that are on site,” she said.
“We weren’t getting any real answers at that point and just wanted to continue to believe — denial that we’re going to get it — because it brought All Complete Excavating to the knees.”
Hooper said the family-run business, which is owed approximately $85,000, has been liquidating equipment and laying off staff.
“It’s been totally stressful because we care about every staff member we have. Then we care about the trucking companies that we’re trying to pay and at the same time, looking for other builders.”
— with files from The Canadian Press
Comments