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