Atcon questions go unanswered

The New Brunswick government is not revealing what it knew about the finances of the Atcon Group when it allowed the Miramichi-based company to borrow more money from its bank last fall.

Atcon was advanced another $9.4 million by Scotiabank in October but that transaction required the New Brunswick government to give up its position at the front of the line of creditors for some Atcon assets.

Victor Boudreau, minister of Business New Brunswick,refused several times in question period on Wednesday to say what he knew last October when Atcon went back to the bank. Boudreau would only say that officials in his department have been watching developments on the Atcon file: "This is a file that we monitor and have followed very closely all along."

Boudreau has contended that Atcon was a victim of the global economic recession that hit in 2008. But documents filed in Miramichi's Court of Queen's Bench as part of the company's bankruptcy case suggest there were problems with how the company was run even before the recession hit.

The New Brunswick government had guaranteed three bank loans to Atcon worth a combined $50 million in June.

Political questions

Opposition MLA Bruce Fitch questioned the level of political involvement during the negotiations with Atcon.

"Can the minister tell us whether it was just he himself who was involved in the negotiations between Atcon and Business New Brunswick or was the premier involved as well? Did he participate in the meetings where these loans or loan guarantees were made between Atcon and Business New Brunswick?" Fitch asked in question period.

Fitch said he wants to know why the provincial government would agree to put taxpayer money at even more risk when Atcon was clearly in trouble.

Boudreau told the legislature that all governments have to make judgments on businesses to fund.

"I want to repeat this: When these files come to the government, it is because there is a certain degree of risk. Not one government not one Liberal government and not one Conservative government can point to a record with a 100 per cent success rate in terms of loans or guarantees that it has put in place for companies."

Atcon is back in court on Monday when a judge could decide to liquidate some of the company's assets to pay creditors.