Lawsuits plagued Port Moody brewery prior to bankruptcy order

[Correction: The story initially referred to the Business Development Bank of Canada offhand as the Bank of Canada, when in fact, the two financial institutions are not associated with one another,]

The Fraser Mills Brewery in Port Moody suddenly closed after the its creditors sought a court order seeking repayment of a loan. 

The bank is not the only business which has been hounding the brewery for money. Fraser Mills has been subject to four civil suits by other businesses since it opened its doors in 2020.

Local residents expressed surprise and sadness on social media on Wednesday after learning of the closure through a bankruptcy and receivership notice posted on the popular establishment located on the 3000 block of St. Johns Street.

The Fraser Mills Fermentation Company Ltd., and its parent company Beyond the Grape on Premises Wine Ltd., are indebted over $750,000 to the Business Development Bank of Canada (BDBC) stemming from a loan granted in 2019, according to court documents.

“The company defaulted on its obligations to the plaintiff in that it failed to make the required payments under the terms of its loan agreement with the plaintiff. No payments have been received since 2022,” court documents stated.

A B.C. Supreme Court judge placed a bankruptcy order on the company on Sept. 18, putting the company assets into a receivership in order to recoup the bank’s money, including its legal costs.

The BDBC filed a civil suit on June 1, 2023, against not only the company, but also its director, Ian MacKerricher, and four other partners, Michael Druce, Daniel Parent, Stephen Sheldon and Warren Boyer.

Previous legal battles

Fraser Mills opened its doors shortly after the COVID-19 pandemic arrived to B.C. in 2020.

In three years of operations, various contractors and suppliers filed suits claiming approximately $150,000 in unpaid invoices.

The first suit was filed in July, 2020. A flooring contractor, Source Floor and Specialties Inc., took the brewery to small claims court alleging they had only been paid $3,100 of a $32,470 invoice for installing luxury vinyl between November, 2019 and January, 2020.

Fraser Mills countersued, but a judge issued a payment order in June 2021.

The same month, Meridian West Mechanical Ltd. filed a small claims suit alleging they were still owed nearly half of a $72,800 invoice for installing drainage and piping for the brewery between October 2019 and June 2020. 

The suit was eventually dismissed in January 2023. 

In August, 2021, Anton Paar Canada Inc., a provider of brewery technologies and equipment, sued in B.C Supreme Court for an unpaid invoice of $66,000 dating from June, 2019, alleging they had only been paid $16,000.

Fraser Mills eventually settled the suit out of court.

The most recent small claims suit came in June 2022, from Barr Down Mechanical Ltd. which claimed they were only paid $30,100 of a $56,100 invoice for installation of air conditioning and water heating services.

The judge issued a default payment order in July, 2022 after Fraser Mills failed to respond to the suit.

Bankruptcy

The main fight of the bank’s bankruptcy suit involves how liable the individual defendants are regarding the debt total.

Terms of the 2019 loan, according to the civil suit, included giving the bank a security interest in all the defendants’ present and future personal property and intangibles, save consumer goods, according to the civil claim.

In its July 2023 petition, the bank assessed the liquidated value of the company’s assets at just over $200,000.

Furthermore, the company still owes approximately $55,000 to the Revenue Canada in unpaid taxes dating back to 2020, according to the petition.

Nearly all defendants argued in the response to the suit that they believed that their personal loan guarantees were capped at 40 percent of the original debt.

They all argued against the amount of money the bank was seeking.

“There is no probability that the defendant will be able to pay the amount claimed,” MacKerricher’s response stated.

Aside from MacKerricher, the defendants claimed they had no active role in the operations or finances in either company, nor any specific knowledge of the debt or liabilities incurred under the guarantee.

They all claim the bank, contrary to the terms of the loan, did not immediately seek repayment after learning of the company’s financial difficulties, damaging their financial position and ability to repay the debt.

The judge opted to set aside the order determining the individual defendants’ liabilities for a later decision.