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SYDNEY, N. S. – ServiCom's proposal to sell its four contracts to an Iowa-based company was submitted "free and clear" on Thursday to the US bankruptcy on any debt the company had to call the creditors' credit.
An urgent court hearing was scheduled for 3 hours. Atlantic time on Tuesday to confirm the sale.
Entry into the court register is still the most direct sign that ServiCom Canada Ltd. will not receive any money for more than 500 employees at a call center in Sydney, some of which have a payment of three to four weeks.
Workers were previously estimated at approximately 600 employees, but the court records show that ServiCom Canada has about 500 people.
Attorney Stephen Kindseth, representing the parent company of JNET Communications and its subsidiaries ServiCom LLC, ServiCom Canada Ltd. and Vitel Communications LLC, said that the selling price was set at $ 400,000. The court will seek to cancel the 14-day waiting period in order to speed up the transaction.
Anthony Marlowe and his MCI company in Iowa, MCI, under the new name MCI Canada, are expected to conclude an agreement to purchase the sole assets of ServiCom's four subscribers with GM OnStar, Sirius XM Satellite Radio, AT & T Services and Allstate Motor Club .
Kindseth, in a lawsuit lodged at the US Bankruptcy Court in New Haven, Conn., Said that the sale is subject to "higher and better offers" if presented.
ServiCom would also offer MCI Canada a $ 50,000 "unbundled fee" because MCI spent money and other resources for brokerage in the past few weeks.
Coral Capital Solutions, a factoring group used by JNET, owes approximately $ 8.1 million to claims paid by ServiCom since November 15, but Coral has not yet collected money owed by ServiCom customers.
Perhaps it's cold comfort for employees who were sure to get back pay. The last time they received pay slips on November 21, they expected to receive a salary last week, but the contract ended the last minute late on Dec. 5, which prompted ServiCom to stop all operations the next day.
"The debtors are painfully aware that the above objective does not reach the goal of paying a certain amount of the payroll after it because of its former ServiCom Canada employees," wrote Kindseth.
He said that JNET and its companies initially attempted to structure the sale of the assets of ServiCom Canada for the creation of funds, but faced two "irresistible obstacles" – ServiCom does not have tangible assets, as its only "real value" is the company that derives from its contracts and laws in Canada, which protect workers' salaries in the event of bankruptcy, make it difficult to transfer assets to employees in a timely manner.
"(It) meant a lot of uncertainty and risk, even if this could not be achieved within the time frame required by customers who currently do not provide the services required by the awarded orders."
At an informative meeting that provincial and federal government officials helped farewell workers on Friday, it was not a surprise that there would be no money for the staff.
Even with the customer waiting for the takeover, it is difficult to turn to reopen the call center before the new year, and this is the concern for Katelynn McNeil, who is employed by the AT & T contract.
AT & T told a lawyer from ServiCom Canada to terminate the contract with a call center if the site does not work until January 1.
"I do not see why things will not go on ahead, they expect it to be (open) before Christmas. That's hope," McNeil said when she waited to hand over the forms for financial support to Nova Scotia's jobseekers.
It was not surprising that employees were not told how difficult the financial situation was for ServiCom. McNeil estimated that the debt is about $ 1,000.
"In view of all that is happening, most of the people in these situations remained in the dark. (We are) a low person on the Totem pole."
Other employees of ServiCom, Mazen Wasel, who has worked for the call center for two years, said he believes in the management team to make the transition to a new company as carefree as possible.
"ServiCom provides jobs for many people in the community and depends on many families. I understand that this is a small period when there is no pay, but it's good to stay positive."
He added, "I understand, many people are upset, but I feel like things end up eventually."
Former director of ServiCom Canada, Todd Riley, said he did not know how the outstanding salaries would be recovered – either with the help of the federal government or with the help of the new owner.
"We are exploring what is available if anything and what can be done with the new owner," he said.
When the sale was completed, Riley said it could take five to six days before the workers returned to the ground floor of the call center.
Kindseth told the court that ServiCom had collaborated with the Nova Scotia government and employment and social development in Canada, which oversees the program of workers' pay protection.
The program allows employees to reimburse some lost wages, bonuses for performance and pay for leave in cases where the employer signs insolvency or bankruptcy.
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Twitter: @cbpost_chris
Related coverage:
• The lawyers revealed the bankruptcy of ServiCom Canada at the US court
https://www.capebretonpost.com/news/local/special-report-lawyers-hash-out-servicom-canada-bankruptcy-in-us-court-268192/
• Iowa City Anthony Marlowe business dealer could complete the purchase of the call center Sydney's CalliCom next week
https://www.capebretonpost.com/news/local/special-report-iowa-city-businessman-anthony-marlowe-could-finalize-purchase-of-sydneys-servicom-call-centre-next-week-268173/
• ServiCom call center in Sydney throws 600 off work
https://www.capebretonpost.com/news/local/updated-servicom-call-centre-in-sydney-throws-600-out-of-work-266092/
• ServiCom bankruptcy documents mention five unsecured creditors based in Cape Breton
https://www.capebretonpost.com/business/servicom-bankruptcy-documents-list-five-unsecured-creditors-based-in-cape-breton-256269/
• Panic at the ServiCom call center in Sydney
https://www.capebretonpost.com/business/employee-panic-at-servicom-call-centre-in-sydney-254169/
• The bankruptcy of the Sydney Call Center
https://www.capebretonpost.com/business/bankruptcy-protection-for-sydney-call-centre-251942/
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