Who wins and who loses in the Yukon Zinc restructuring
On September 2nd, Yukon businesses will vote on whether to receive a fraction of the money they are owed for work completed at the Wolverine mine. Yukon businesses labelled “unsecured creditors” are owed millions of dollars, but under the restructuring plan proposed in a B.C. court they could only receive a tiny fraction of their claims.
That’s because if Yukon Zinc owes a business $5,000 or more, they are only being offered restitution to the tune of between 7.5 to 11.5 cents a dollar. Clearly, when it comes to the Yukon Zinc restructuring process, there are winners and there are losers.
Local businesses that have provided services like equipment rental, transportation and logistics, engineering, geotechnical services haven’t been paid in months. And soon, they’ll have to make a decision to accept or reject a sliver of what they’re owed.
Meanwhile, the Yukon government is getting $3 million from the company to finally fill the mine’s clean-up deposit fund. Why did mines minister Scott Kent let Yukon Zinc carry on so long without an appropriate deposit in place?
Court documents show that in July, Yukon Government lawyers met with JDC Group, the company backstopping Yukon Zinc, to discuss the restructuring plan. It is clear from these documents, public statements, and correspondence with unsecured creditors that Kent couldn’t -- or wouldn’t -- do anything to ensure that Yukon businesses got paid for their hard work. Meanwhile, none of the court hearings that determined the repayment levels in the restructuring plan were held in Whitehorse so they could be accessible to Yukon businesses.
A ‘yes’ vote by affected creditors on September 2nd means Yukon Zinc sheds its obligations to those local small businesses, which could make the mine more profitable if there is an upswing in mineral prices -- or more attractive to a potential buyer.
The mining industry can make an important contribution to Yukon’s economy. The Yukon NDP stands with the Yukon public who want to see companies like Yukon Zinc follow the rules, hire Yukoners and benefit local businesses, then clean up when the job is done.
There are clear winners and losers in the Yukon Zinc restructuring process. Yukon businesses are the losers. Sadly Scott Kent, who is ultimately responsible, has done little to help Yukon businesses. What does this say about the Yukon Party government’s commitment to them? With a full payout for the Yukon government but only 10 cents on the dollar for Yukon businesses, one has to ask: what kind of deal is that?