Failed gam­ble

NSBI writes off $10M in loans to Cape Bre­ton re­spon­si­ble gam­ing com­pany

Cape Breton Post - - Front Page - BY NANCY KING nancy.king@cb­post.com

NSBI writes off $10M in loans to Cape Bre­ton re­spon­si­ble gam­ing com­pany.

The prov­ince’s arm’s-length busi­ness de­vel­op­ment agency has writ­ten off the more than $10 mil­lion it was owed by Tech­link when the Cape Bre­ton com­pany went out of busi­ness.

In all, Nova Sco­tia Busi­ness Inc. wrote off $26,236,023 that it was owed for the 2016-17 fis­cal year. By far, the largest amount was owed by Tech­link In­ter­na­tional En­ter­tain­ment Ltd., a gam­ing soft­ware de­vel­oper.

There were four write­offs re­lated to Tech­link, to­talling $10,088,824.

NSBI also wrote off $238,418 that was owed to it by an­other Cape Bre­ton com­pany, Bill­didit.

In 2015, a re­ceiver was ap­pointed by three of Tech­link En­ter­tain­ment’s se­cured cred­i­tors — in­clud­ing NSBI — to take pos­ses­sion of its as­sets, in­clud­ing patents and tech­nol­ogy, and to pro­ceed with their sale.

NSBI pro­vided in­for­ma­tion Tues­day in­di­cat­ing that it re­cov­ered $488,816 from Tech­link and $125,210 from Bill­didit. The write­offs oc­curred af­ter NSBI acted on all se­cu­rity.

Tech­link, headed by John Xi­dos, billed it­self as a re­spon­si­ble gam­ing tech­nol­ogy firm that first opened in 1994. The com­pany closed its doors in June 2015 af­ter it laid off an un­con­firmed num­ber of staff. It pre­vi­ously had 60 em­ploy­ees.

Its Syd­ney River build­ing was un­der the se­cu­rity of the Busi­ness De­vel­op­ment Bank of Canada, which ap­pointed its own re­ceiver.

Tech­link ran into dif­fi­culty in 2014 when the prov­ince pulled the plug on its re­spon­si­ble gam­bling sys­tem in video lot­tery ter­mi­nals across Nova Sco­tia. The pro­vin­cial gov­ern­ment had re­fused the com­pany a $750,000 cash ad­vance on a con­tract with At­lantic Lot­tery Corp.

NSBI had been an in­vestor in Tech­link since 2004 and had its money in­vested in the com­pany through eq­uity in­vest­ments and out­stand­ing loan amounts. The com­pany also at­tracted al­most $22.5 mil­lion in pri­vate in­vest­ment.

In 2015, the liq­ui­da­tion of the Bill­didit man­u­fac­tur­ing plant and its con­tents — in­clud­ing nu­mer­ous pieces of ma­chin­ery and equip­ment — was listed on an auc­tion and ap­praisal web­site. Bill­didit, headed by com­pany pres­i­dent Joe Menchef­ski, filed for re­ceiver­ship that year, ac­cord­ing to an in­sol­vency records search.

The com­pany recorded no li­a­bil­i­ties or as­sets with the Of­fice of the Su­per­in­ten­dent of Bank­ruptcy Canada. A year ear­lier, Bill­didit laid off 16 em­ploy­ees fol­low­ing news that the At­lantic Canada Op­por­tu­ni­ties Agency had pulled the com­pany’s $500,000 loan.

Sabian, an in­ter­na­tion­ally renowned cym­bal de­signer and man­u­fac­turer based in New Brunswick, ac­quired Bill­didit in January 2014. Bill­didit be­gan op­er­a­tions in 2009. While it pri­mar­ily de­vel­oped and sold drum and per­cus­sion-re­lated equip­ment, it also pro­vided de­sign as­sis­tance, 3D print­ing, ad­vanced com­puter-con­trolled ma­chin­ing and com­po­nent elec­tro­plat­ing.

CAPE BRE­TON POST

Tech­link’s Syd­ney River build­ing is seen in this June 2015 file photo.

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