Questions swirl around the future of a long-time Virden farm equipment dealership after Morris Group had an order granted on Jan. 19 to extend a stay of proceedings under the Companies’ Creditors Arrangement Act.
Morris Industries originally filed for protection from creditors in December after failing to meet its obligations to vendors in May of 2019 and was unable to meet payroll seven months later. The stay of proceedings will give Morris Industries until March 27 to continue operating while restructuring the company and its finances. The Western-Canadian-based business did secure $5.7 million in interim financing from the Bank of Montreal earlier this month.
Virden’s Morris Sales and Service located on the west end of Frontage Road appears to be among the potential cuts to the company according to documents filed with the protection application. That document included a plan that may include selling assets; downsizing the head office in Saskatoon, Sask.; consolidating its manufacturing into one site; auctioning off old inventory; laying off some of its 134 employees and closing Morris Sales and Service.
The company’s only sales and service location is in Virden.
Morris Sales and Service manager Trevis Hunter could not speak about the issue with the Empire-Advance and a spokesperson for Morris Industries could not be reached for this article.
Morris Industries was originally established in 1929 by East-central Saskatchewan resident George Morris who developed and manufactured various pieces of agricultural equipment. The business moved to Yorkton, Sask. in 1948 working through a network of distributors throughout Alberta, Saskatchewan and Manitoba. Another manufacturing plant was constructed in Minnedosa, Man. 12 years later. A third facility was opened in Minot, N.D. in 1972.
George Morris’s daughter, Wendy Morris, purchased the company in 1997. She ran it for ten years before selling it to Casey Davis, its previous Morris Industries President and Chief-Executive-Officer. The sale ended 78 years of Morris family ownership.
The Minnedosa plant was expanded in 2014, then the company was sold again to a group managed by former president Ben Voss. By this time, the company was selling product throughout North America, Australia and Eastern Europe. The new owners developed and instituted a growth strategy at a time when sales were slumping and international trade issues were hindering various avenues to dealers and customers. Nevertheless, the company was opened to offers for purchase in July of 2019.
In their application for an extension of the protection, Morris Industries had debts of almost $53 million to large and small lenders, creditors and unsecured lenders such as suppliers. Meanwhile, Morris Industries finances for the fiscal year ending Aug. 31, 2019 showed it had $65.9 million in assets including $34.2 million of inventory and $16.5 million of physical assets. Liabilities sat at $63.3 million.
On Friday, the Saskatoon Star-Phoenix reported that the Saskatoon judge approved the “sale and investment solicitation process” developed by Alvarez and Marsal Canada, the consulting firm the court appointed to oversee Morris’s restructuring. This plan includes the sale of assets or shares; refinancing, reorganizing, recapitalization, restructuring, joint-venture, merger; other business transaction; or a combination of these practices.
