Tried to work with fish processor: creditor

A P.E.I. community group is defending its decision to reject a plan that would have kept Mariner Seafoods in business.

The Montague seafood processor has spent the last year under court protection from creditors, but that was lifted last week. Active Communities, a Montague-based development group, rejected the latest financial plan from the company.

Mariner Seafoods and its president Mark Bonnell owe creditors about $11.5 million. Active Communities is one of their biggest creditors, in for $2.5 million.

The unsecured loan was made in 2009 under a special federal program to help out fish processing plants struggling through the recession.

"There wasn't very much security to be had at that time but we did have Mark's personal guarantee and of course his word that he would pay it back," said Jim Johnson, past chairman of the board for Active Communities.

Johnson said Active Communities made several proposals to Bonnell. One was to convert the loan into shares in the company and keep Mariner Seafoods open.

Johnson said Bonnell never replied to that offer.

"Active Communities has [done] nothing but keep the business afloat," he said.

"According to Mark himself, they wouldn't have survived past the middle of May 2009 without that influx of cash, and that would have left people unemployed right in the middle of lobster season."

Bonnell declined to speak to CBC News, and would not respond directly to Johnson's comments. He did say that under his latest proposed refinancing plan Active Communities would have got about $200,000 back, but now they will get nothing.

Even though Mariner has lost its court protection from its many creditors, Johnson said he's still hopeful the company and its 250 fish processing jobs will not shut down permanently.

"Mark keeps surviving, one way or another," he said.

"He's bought a lot of lobster from a lot of fishermen and he's employed a lot of people."

The P.E.I. government is owed $400,000, and will put in its own receiver to protect its investment.