DARTMOUTH, NOVA SCOTIA -- Homag Canada's request to repossess approximately $1.1 million at the failed Scanwood Canada Ltd. factory, which supplied ready-to-assemble furniture to IKEA, was rejected by the Supreme Court of Nova Scotia.
Video produced by Green Hunt Wedlake
Inc. displays some of the equipment at the Scanwood furniture factory.
A legal move by Homag Canada Inc. to regain possession of four machines it recently installed at the 220,000-square-foot Scanwood plant was dismissed by Justice Suzanne Hood. The judge also ordered Homag Canada to pay several thousands of dollars in legal costs to cover the court action.
The plant, including all of its woodworking machinery and inventory, has been placed for sale by Green Hunt Wedlake Inc., a insolvency consulting firm based in Nova Scotia, which took the plant into receivership after it closed its doors in April.
Judge Hood ruled that removal of the Homag equipment would be detrimental to attempts to sell the plant, according to the Chronicle Herald. Green Hunt Wedlake told the newspaper that is has received three inquiries for the facility, including one from Bo Thorn, former director of the plant that was constructed and originally operated by Swedwood, the manufacturing arm of global furniture powerhouse IKEA. Offers for the facility will be accepted through July 22.
Green Hunt Wedlake purchased a half-page advertisement in the June issue of Wood & Wood Products announcing the sale of the plant. In addition to Homag, the ad notes that the plant has equipment from Homag divisions Weeke machining centers, Bargstedt material handling equipment, plus Buerkle laminating equipment and Anthon panel saws. The plant has the capacity to produce 1.2 million units of wood veneer dressers.
Lawyers representing some of the creditors argued against allowing Homag Canada to remove the equipment. Scanwood reportedly owed $24 million when it shut down. The creditors are banking on a successful sale of the plant as their best chance to recoup their loans.
The lawyer representing Homag Canada, which reportedly is owed $611,000 for the equipment, contended that it is unlikely someone will buy "a single-purpose operation like this to put it back into production."
Meanwhile, the Canadian Auto Workers (CAW), the union representing many of the former 220 Scanwood employees, said it would seek succession rights in the event the plant is purchased with the intent to make furniture.
Scanwood closed its doors after union employees rejected management's request to accept wage and scheduling concessions. Most of the workers made about $12 an hour, according to the Chronicle Herald.
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