In documents filed in U.S. bankruptcy court, iMarketing Solutions Group Inc. (IMSGI) lists the Canada Revenue Agency as well as the governments of Quebec, Nova Scotia and Manitoba among its creditors.
The company, through its subsidiary Responsive Marketing Group, continues to work as the Conservative Party’s telemarketing fundraiser. In the last election, RMG made millions of voter contact calls to identify Tory supporters and get them out to vote.
National Revenue Minister Gail Shea’s campaign in Prince Edward Island was among the 90 Conservative campaigns that hired RMG to make voter-contact calls during the election. She paid the company $7,500 for services, her financial return shows.
Officials in Shea’s department will now be responsible for collecting the money RMG owes the federal government after the party emerges from creditor protection.
“The Minister has no involvement whatsoever in administrative decisions related to individual tax cases,” Shea’s director of communications, Clarke Olsen, wrote in an email.
“Non-partisan public servants at the Canada Revenue Agency are responsible for the day-to-day administration and enforcement of tax legislation.”
Jocelyne Brisebois, a spokeswoman for the conflict of interest commissioner, said Thursday that she couldn’t comment on Shea’s potential conflict of interest, but ministers do have to avoid making decisions about matter where they have a conflict.
“Section 21 of the Conflict of Interest Act requires public office holders to recuse themselves from any discussion, decision, debate or vote on any matters in respect of which they would be in a conflict of interest.”
Neither the Conservative Party nor its candidates are listed as creditors in bankruptcy court filings.
Faced with mounting debt and declining revenues, IMSGI filed for protection under the Companies’ Creditors Arrangement Act in Canada and also made U.S. Chapter 15 filings related to its American affiliates.
Those filings show IMSGI owed the CRA $690,000 in outstanding Harmonized Sales Tax payments and another $235,000 for unpaid payroll deductions, according to an affidavit filed in a Delaware court by Chief Executive Officer Andrew Langhorne. The amounts owed to provincial governments are not itemized.
The company’s secured creditors are the Canadian Imperial Bank of Commerce, owed $2 million, and an investment fund run by Argosy Partners, which holds a $3.5 million promissory note.
Hundreds of unsecured creditors are owed a total of $7.6 million, many of them organizations for which IMSGI raised funds, such as the National Capital Sports Council of the Disabled, the Toronto Professional Fire Fighters Association and the Hockey Hall of Fame.
The Ottawa Carleton District School is listed as a creditor, as is the Boston Bruins Alumni hockey team, which plays old-timer games for charities, lead by former Bruins defenceman Ray Bourque.
Langhorne’s affidavit says the company owes tax authorities $1.2 million and trade creditors $4.3 million. The company estimates it faces severance obligations of $900,000 and future obligations related to abandoned facilities of $800,000.
The company laid off 400 “front line contact centre employees and related management employees,” in the last week of March.
RMG specializes in political telemarketing calls for conservative parties, including Alberta’s Wildrose, the Saskatchewan Party, the B.C. Liberals and the Ontario Progressive Conservatives. Through its U.S. affiliates, it says it worked for Republican candidates.
Declining revenues from its political and charity calling, combined with problems processing mailed donations through its clearinghouse in the U.S., left the company in a serious cash crunch.
Upkar Arora, the court-appointed restructuring officer who is in charge of IMSGI during the bankruptcy, said Thursday that it is too soon to say whether the company will be sold, continue operating or be broken up and sold off.
“We are obliged to look at all the outcomes to make sure we maximize value for stakeholders,” he said.
Arora said Langhorne remains on the board and is acting as the company’s CEO.
He said the process will proceed in a non-partisan, objective manner, supervised by the court.
“The company is in a court supervised restructuring process and has a plan in place to pay its CRA obligations,” he said.
Langhorne and RMG were drawn into the robocalls affair last year when a former call centre employee went public with allegations that she and other call centre workers had made questionable calls telling voters about their polling stations.
Langhorne vigorously rebutted any suggestion of wrongdoing in a federal court case brought by the Council of Canadians, an activist organization that asked the court to overturn the results in six ridings.
RMG was represented at the hearing by lawyer Tom Barlow, of Fasken Martineau DuMoulin, one of the firms named as a creditor.
Original Article
Source: canada.com
Author: GLEN MCGREGOR AND STEPHEN MAHER
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