Atcon faces court hearing

The Atcon Groupwill bein a Miramichi court on Monday as its biggest creditor, Scotiabank, is calling in its loans to the financially troubled construction company.

The first court hearing in the Atcon receivership is scheduled to begin at 1:30 p.m. on Monday.

Scotiabank filed court documents last Thursday requesting that some of Atcon's companies be placed in receivership.

In one filing, the bank is asking the court to place several Atcon companies under the Companies Creditors Arrangement Act, which will allow a court-appointed monitor to watch Atcon while it continues to operate.

Thesecond filing is under the Bankruptcy and Insolvency Act, which is being applied to the rest of Atcon's companies.

Last year, the New Brunswick government extended three different loan guarantees to Miramichi-based Atcon worth a combined $50 million.

Those were on top of earlier loan guarantees and loans, which elevated the provincial government's exposure to roughly $70 million.

If Atcon can't repay the bank, and the receivership documents filed in Miramichi court last week suggests it can't, then the provincial government will have to pay out a significant amount of money.

The provincial government is actually in a weaker position to recoup its money than was earlier believed because of a refinancing of Atcon that unfolded quietly last fall.

Provincial officials have confirmed to CBC News that Atcon used another bank loan to refinance its operations last fall. The amount of money involved in that refinancing is unknown.

Inreturn for providing the loan, the New Brunswick government agreed that the bank could leapfrog ahead of it as a secure creditor for some Atcon assets.

What that means now is that if the time comes to seize and sellthose assets, the bank will be first in line for more of the money and the province will get less.

The Atcon Group has faced a series of troubles since last fall.

Several former contractors and employees have launched legal action, or threatened it, for alleged unpaid bills.

And the news got worse for Atconin January when it was removed from the $165-million Deh Cho Bridge contract in the Northwest Territories because it couldn't agree on terms for the second phase of construction with the bridge's developer.