My first corporate investigation

Canadian Glass was in the flat glass industry (as opposed to hollow glass, which is glass containers). Margins have always been half-decent in that business, and, if you minimized your cutting losses on your jobs and negotiated good payment terms with your suppliers, you were always assured a good living. However, if you did not keep these in mind, the results are disastrous.

I learned that the first week I started there, when Alf came into my office and told me we were flying to Montreal the following morning. One of Charlebois’ customers, Starr Glass, had just ceased business, and our receivable from them exceeded $60,000 (quite a considerable amount of money at that time). Not only that, our parent (Pilks) was in to them for more than double that amount, and they wanted us to report on the total situation.

Why all this concern? You have to appreciate the differences that existed then in how bankruptcy laws were applied across the country. Before the federal bankruptcy rules were standardized in 1992, provincial rules of civil procedure applied with respect to when a creditor could appoint a receiver to come in to seize a debtor’s assets. Common-law jurisdictions in Canada generally required about 10 days’ notice before such a move could be made, but no notice was required under Quebec’s Code of Civil Procedure.

Starr Glass had cash flow problems, to put it mildly. Not being in a position to secure further financing from more traditional — and legitimate — financial institutions, it sought a loan from an “alternative source” (ie, the loan sharks). Still having cash flow issues, the principal tried to stiff them, and they stiffed him — he was assassinated, and one of Starr’s creditors sent the receiver in immediately to seize the assets.

We arrived at Dorval airport, and were met by Jean-Pierre Ross, Jacques Bellemare, and Régent Millette (the credit manager at Charlebois). As it was close to noon, we went first to a local brasserie to discuss the affair over lunch.

Alf asked Régent to update us on the issue. Régent said, “Don’t worry, I pulled our glass out of there last week. I received a telephone call advising me that it would be a good idea if I did!”

And that was that. Under the terms of acquisition that were in effect from 1979 under the Foreign Investment Review Act, Canadian Glass and Pilks had to manage their operations separately from each other as if they were third parties. Pilks did not have as good a series of connections in the Quebec construction industry as Charlebois had, and thus were out their money.

After lunch, we went over to Charlebois, which was on Boulevard Coûture in St-Léonard, where I got acquainted further with everyone. The only other person I can recall from those days is Gilles Grégoire, who was Charlebois’ sales manager (quite a character in his own right).

That was an eye-opener, and quite the beginning to what proved to be a very dramatic and exciting time at that company.


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