PKI founder wastes court's time with bankruptcy fight says creditor
Wednesday, December 17, 2008
© Copyright AgMedia Inc
by BETTER FARMING STAFF
Personal bankruptcy proceedings against the founder of a failed pigeon breeding scheme won’t get under way until March.
Dale Leifso doesn’t mind.
A three-month-plus delay is far better than no legal proceedings taking place at all against Arlan Galbraith, founder of Pigeon King International, Inc., observes this Paisely area farmer.
In 2007, Leifso invested more than $256,000 into Galbraith’s scheme that involved selling pigeon breeding pairs for as much as $500 and buying back offspring for up to $50 each. The 550 pairs Leifso acquired arrived in January 2008.
The farmer thought he’d signed a contract that would earn him $250,000 a year for 10 years. When the Waterloo, Ontario company closed its doors in June, a month ahead of his first shipment, Leifso, like nearly 1,000 other breeders in Canada and the United States, was instead saddled with a pile of worthless pigeons.
He euthanized the birds in October. Now the bank is calling. “Eighty-five, 90 per cent of the money I invested in this was borrowed,” he says. “The bank is quite concerned, to put it mildly.”
He’s frustrated that the police have not yet made a decision about charges against Galbraith. He’s concerned Galbraith is fighting the personal bankruptcy application.
“He’s going to waste the court’s time and he’s going to waste somebody’s money,” Leifso says.
Former PKI investor Joline Humbert, Republic, Ohio, isn’t sure what the bankruptcy proceedings might mean to her.
After PKI collapsed in June, Humbert and her husband, Aaron, joined about 50 former U.S. breeders in an effort to recoup their losses.
She’s growing increasingly frustrated with the lack of information – and inaction - from authorities. Others in her group are “getting more and more upset.”
“It’s very difficult being across the border and so far removed,” she says. “The only thing happening for us is we’re (Joline and Aaron) getting closer and closer to making payments on our ($400,000 US) loan.”
The couple’s first payment - $50,000 US - is due in February.
That’s a whole month before a London, Ontario court will hear the application to declare Galbraith personally bankrupt.
James Wiersma, of Fishersville, Ontario, one of four creditor-appointed inspectors in the PKI bankruptcy, filed the application in November with the Ontario Superior Court of Justice in Bankruptcy and Insolvency.
Wiersma claims Galbraith personally owes him nearly $23,000 under the terms of a pigeon-breeding contract. He alleges others are owed much more.
Galbraith is not only asking the court to dismiss Wiersma’s application, but also to repeal the Nov. 12 appointment of BDO Dunwoody as interim receiver. BDO is also PKI’s bankruptcy trustee.
He’s claiming that he’s been able to pay his debts and doesn’t owe Wiersma anything, or if he does, it’s under $1,000. He claims it’s a company that owes the money and alleges Wiersma is using “this court as a collection agency.”
Steven Gadbois, Galbraith’s lawyer, says he’s waiting to review the evidence that prompted the push to declare Galbraith personally bankrupt. What he’s seen so far hasn’t convinced him there’s a right to declare his client bankrupt. “The man’s not bankrupt; of course he should fight it.”
Reached Dec. 11, Galbraith declined to comment.
The hearing, scheduled for three hours, will take place March 9, 2009.
Both Leifso and the Humberts signed contracts with PKI. BF