Ontario's Pigeon King Arlan Galbraith declared personally bankrupt

Wednesday, December 16, 2009

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by BETTER FARMING STAFF

After deciding not to contest personal bankruptcy proceedings against him, Ontario’s self-proclaimed ‘Pigeon King’ allowed himself to be declared bankrupt.

Frank Highley, the lawyer representing Arlan Galbraith’s interim receiver, BDO Dunwoody Ltd. informed Justice K.A. Gorman of the former pigeon entrepreneur’s decision in the London Superior Court of Justice in Bankruptcy and Insolvency. Steven Gadbois, lawyer for the defendant stood quietly by during the brief hearing this morning. Galbraith himself was not present.

Today’s bankruptcy hearing comes more than a year and a half after Galbraith placed his company Pigeon King International Inc. in bankruptcy. In November 2008 a creditor filed an application to declare Galbraith personally bankrupt. That lapse of time has angered many creditors. Outside the courtroom, Gadbois said Galbraith informed him of his decision via telephone on Dec. 11.

Fighting the personal bankruptcy proceedings would involve legal and court costs and Galbraith “wanted to avoid these,” so he voluntarily consented to the order, Gadbois says. “It was not a pleasant decision for him, obviously,” says Gadbois.

This is Galbraith’s second personal bankruptcy. In 1981 he received an unconditional discharge following the collapse of a meat business he ran with his brother. At that time he listed assets of $470,000 and liabilities of $410,000.

Gadbois said so much time was needed to reach a decision in Galbraith’s latest bankruptcy because it was necessary to gain access to, and assess, company records that Galbraith surrendered to PKI’s bankruptcy trustee, BDO Dunwoody. At the outset Gadbois had told reporters: “the man’s not bankrupt; of course he should fight it.”

Once the contents of 52 banker boxes, two suitcases and a cardboard filing cabinet were reviewed, “it was determined there was a debt that could not be dealt with appropriately,” Gadbois says.

With the company’s “huge” cash flow, the volume of records is to be expected, he says.

PKI and Galbraith offered pigeon breeding pairs for as much as $500 and bought back offspring for up to $50 each. The company’s June 2008 collapse left debts estimated to total nearly $39 million and nearly 1,000 breeders in Canada and the United States with thousands of worthless pigeons.

“It’s really a tragic situation for everybody involved,” Gadbois says.

James Wiersma of Fisherville, Ontario, one of four creditor-appointed inspectors in the PKI company bankruptcy, filed an application to declare Galbraith personally bankrupt in November 2008.

Gadbois says the bankruptcy puts to rest Wiersma’s claim against Galbraith as well as civil actions filed by Robert Siebring, who operated pigeon holding barns for Galbraith and his company near Palmerston, Rossburn, Manitoba-based Fred Clement, who leased barns to Galbraith and PKI, and the landlord of Galbraith’s former office in Waterloo.

Galbraith’s property near Cochrane appears to be his client’s only major asset, Gadbois says.

The debt “is going to exceed the amount available by a significant component,” he says. 

Highley notes the bankruptcy takes effect immediately and transfers control of Galbraith’s personal assets to BDO Dunwoody.

Highley says payments to creditors from Galbraith’s assets will reflect the size of their claim.

Susan Taves, senior vice president of BDO Dunwoody, could not be immediately reached for comment. BF