P.E.I. seafood plant's jobs at stake

The financial problems facing eastern P.E.I.'s Mariner Seafoods are a growing concern for the town of Montague.

Mariner Seafoods is facing lawsuits for the repayment of $3 million in loans. The plant employs 250 in the town, which has a population of just 1,800.

Mayor Richard Collins is worried the company could close.

"It would be a major disappointment. We went through this a number ofyears ago when Langley's closed and 700 people were out of work, so it's a major situation in these times we're going through."

Last spring, company president Mark Bonnell negotiated two loans: one from his sister, Linda Love, for $500,000; the other for $2.5 million from Active Communities Lending, a government-funded development corporation.

Active Communities gave that loan without any security. Bonnell was supposed to pay it off, beginning in August, with monthly instalments of $500,000. Court documents say he has defaulted on both loans, and his sister and Active Communities are suing him for the money.

Active Communities served its legal papers on Bonnell on Christmas Eve.

Bonnell declined to do an extensive interview on the loans issue, but he did tell CBC News on Monday that his company did between $25 million and $30 million worth of business last year and employed over 250 people from the Montague area. Without the loan from Active Communities, he said, the company would not have been able to operate.

Bonnell has been given 20 days to respond to theActive Communities statement of claim. Active Communities declined to be interviewed.