CORE Closure update: Globe and Mail gets some details
The Globe and Mail’s Michael Posner has continued to follow up on the closure of CORE Digital last month. His article from Fridays’s Globe and Mail gives further details behind the FX shops demise.
It looks like the company was further in debt than I’d heard:
The bankruptcy followed a seven-month negotiation involving C.O.R.E., the Royal Bank of Canada and Ontario’s Ministry of Finance. By the middle of March, according to documents filed in Ontario Superior Court, C.O.R.E. was in default on loans, lines of credit and rent to the tune of $7.3-million.
Until then, according to an affidavit sworn by a Royal Bank executive, government officials had indicated a willingness to help C.O.R.E find a solution to its problems. Indeed, said former C.O.R.E. president Ron Estey, the discussions were so advanced that finished documents had been drafted.
Apparently, the Shat was called in. According to the article, William Shatner was still a partner in the company, and himself made numerous calls directly to senior government officials.
The provincial government is sticking by there decision, claiming no formal loan program was available under which C.O.R.E. would have qualified. The point Michael raises, which has been noted elswhere, why did it take the government 7 months to figure that out?
Michaels article says more between than lines than within. He draws a few lines between our province, currently in dept to the tune of $21-billion, but willing to dole out 263 million over the next 10 years to Ubisoft for the promise of 800 jobs, McGuinty himself justifying the move as being “about strengthening the industry we already have here.” and then pointing out what seems obvious to all involved:
“So McGuinty has a quarter of a billion dollars to cede to a foreign company for 800 possible jobs, but can’t underwrite less than $10-million to save 120 existing jobs at C.O.R.E,” said one industry executive. “It’s perplexing.”
So the demise of CORE does indeed remain a mystery. The question is still sitting there, and we won’t likely get an answer. I can understand the provincial government taking a pass on a company they consider a bad risk. But their reasoning is sketchy. They’ve created new programs before, they knew they were going to be upping the tax credit, I’m not convinced the province couldn’t have done something top save those jobs. But, what’s done is done, and sadly, in this instance, it’s CORE Digital.