Litz files for creditor protection as company files civil suit

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This article was published 03/11/2017 (2512 days ago), so information in it may no longer be current.

A Winnipeg company that is suing its former chief financial officer filed for bankruptcy protection this summer.

R. Litz & Sons Company Ltd. — also known as Litz Crane & Rigging — filed for protection from its creditors on Aug. 18.

The company founded in 1904 serves the construction industry, operating cranes, and hauling and repairing heavy equipment.

It filed a notice of intention to make a proposal: a procedure under the Bankruptcy and Insolvency Act, that allows financially troubled corporations the opportunity to restructure their affairs.

It’s the first stage of a process, says PricewaterhouseCoopers Inc., the trustee working with Litz Crane. The proposal gives the company the opportunity to avoid bankruptcy, and allows creditors to receive some form of compensation for amounts the company owes them.

On Oct. 30, Litz Crane filed a civil lawsuit in Court of Queen’s Bench against its former controller and CFO, Peter Ramdath. The statement of claim alleges $3.1 million was misappropriated from the company before Ramdath resigned Oct. 2.

Before his resignation, Ramdath reportedly wrote a letter to Litz Crane’s suppliers, letting them know the company had entered into the creditor-protection process, and PricewaterhouseCoopers was helping with its restructuring.

Litz’s day-to-day operations were expected to continue normally. Suppliers were told all goods and services provided after Aug. 18 would be paid in full, but legislation prevented the company from paying for amounts owing prior to the date it filed for bankruptcy protection.

In its notice of intention to make a proposal, Litz Crane had to list all creditors with a claim of $250 or more — the largest being Canadian Western Bank, owed $8.3 million.

The list of claims totalled more than $9.1 million.

In its statement of claim against Ramdath, Litz Crane said over the last three years a series of unauthorized transactions took place without the knowledge or consent of the company from March 1, 2014, to July 3, 2017.

The losses from those transactions totalled $3,109,686.

The claim states company credit cards for transactions were used.

Court documents allege Ramdath has been disposing of his assets, or trying to dispose of his assets, in Manitoba since he resigned. The statement of claim asks for a court injunction that would restrain him from disposing of any assets in Manitoba. The claim also says the company is entitled to an accounting and tracing of all sums reportedly misappropriated from Litz Crane, to recover the money it is owed.

No statement of defence has yet been filed.

Neither Litz Crane’s general manager, Patrick Szypowski, nor the company’s lawyer, Catherine Howden, would comment Friday.

carol.sanders@freepress.mb.ca