Local Restaurant Thread

[CorsiHockeyLeague]

This is a really poorly reported story. Did Beaton's company go under or did she falsely claim she filed for bankruptcy personally? If it's the former, this is much ado about nothing.

[Cappy]

Originally Posted by CorsiHockeyLeague

This is a really poorly reported story. Did Beaton's company go under or did she falsely claim she filed for bankruptcy personally? If it's the former, this is much ado about nothing.

Just the company that was set up to own Farm.

Janice Beaton Cheese is owned by a separate company. So is Maribou.

[Cecil Terwilliger]

Originally Posted by CorsiHockeyLeague

This is a really poorly reported story. Did Beaton's company go under or did she falsely claim she filed for bankruptcy personally? If it's the former, this is much ado about nothing.

I don't think anyone is concerned with the semantics of it.

The fact of the matter is that it is bad optics to leave unpaid employees. If she's got enough personal resources to start a new business that presumably costs 10s of thousands of dollars (if not hundreds), the nice thing to do would be to make those employees whole by forking over a couple of grand.

[CorsiHockeyLeague]

Originally Posted by Cecil Terwilliger

I don't think anyone is concerned with the semantics of it.

This isn't semantics. It's really frustrating how people around here seem not to care at all about the details, even when they're important. It's probably just people in general, really, and CP is probably no worse (and possibly better, depressingly) than the general public but you can't just wave away stuff like that.

She doesn't owe these people any money. The company does. The company has no money to pay them.

A person and a person's company are two completely different entities. That's one of the main reasons that companies exist in the first place - to incentivize people to engage in business ventures by creating a structure where you can try to make a successful business, and if it doesn't work, you don't end up losing your house. If I have venture capital, I can fund two separate startup businesses, and if one of them doesn't work out, I can rest assured that the other will be able to go forward without disruption. I'm therefore far more likely to start both businesses.

The fact of the matter is that it is bad optics to leave unpaid employees. If she's got enough personal resources to start a new business that presumably costs 10s of thousands of dollars (if not hundreds), the nice thing to do would be to make those employees whole by forking over a couple of grand.

The "nice" thing to do? I guess... why not take that money and give it to the United Way, or doctors without borders? That would be nice.

Bankruptcy laws weren't drafted at random. There are deliberate policy choices made to balance the protection of creditors with the goals of the market. Claims for unpaid employee wages in bankruptcy get very, very high priority, whether it's a BAA process or a CCAA process. They certainly outrank shareholders; if they didn't get paid, then once this company filed for bankruptcy (or CCAA protection), I can pretty much guarantee that Beaton and any other equity investors got zero dollars out of it. The problem is that secured creditors still come first, and even they tend to get pennies on the dollar... there's often not much pie left for anyone else. That's a failed business.

If we wanted, we could make sure that every employee and creditor gets paid very easily - just pass a law that sends debtors, or the primary shareholder of a debtor company, to prison for not paying their debts. Problem solved! Wait, do you suppose that might discourage people from investing in private companies and starting businesses in the first place, thereby creating the jobs that created the debt these employees want to recover? Would it maybe stop people from buying shares in anything, if they could lose not only the money they invested but all the money in their bank account as well?

Now, if she just told everyone that she filed for bankruptcy and instead just absconded with a bunch of cash, then yeah, that's both illegal and criminal. Doesn't sound like it, though.

[nik-]

Legal or not, she looks awful doing this and deserves any criticism.

This isn't the United Way, those people provided her services and she used corporate distinction to screw them.

I'm assuming her new place will fail too.

[Shazam]

Originally Posted by Cecil Terwilliger

I don't think anyone is concerned with the semantics of it.

The fact of the matter is that it is bad optics to leave unpaid employees. If she's got enough personal resources to start a new business that presumably costs 10s of thousands of dollars (if not hundreds), the nice thing to do would be to make those employees whole by forking over a couple of grand.

You're conflating two things: Money needed to start a company and ownership.

Yeah, she owns 50% of the new company. But you hardly need any money to do this. They probably did what everybody else does - say, 1000 shares at $1 each and so she spent $500 on her portion of the shares.

She probably has dick for free cash right now, so it's the other investors that plowed in seed money.

With that there's probably some conditions on her, like if she ####s this up everybody gets to chop off a finger.

[CorsiHockeyLeague]

Originally Posted by nik-

This isn't the United Way, those people provided her services and she used corporate distinction to screw them

It shouldn't look awful. She didn't get off on a technicality. This is the entire point of the concept of structuring a business as a corporation. Incidentally, it's not like she didn't lose a whole bunch of money too; she almost certainly did, though I have no idea how the company was funded.

At least the employees get $2k each (to the extent there's any money left in the bank account at all, which there usually is, because all of the assets have to be sold off). Any other unsecured creditors get zilch.

[Cecil Terwilliger]

Originally Posted by CorsiHockeyLeague

This isn't semantics. It's really frustrating how people around here seem not to care at all about the details, even when they're important. It's probably just people in general, really, and CP is probably no worse (and possibly better, depressingly) than the general public but you can't just wave away stuff like that.

She doesn't owe these people any money. The company does. The company has no money to pay them.

A person and a person's company are two completely different entities. That's one of the main reasons that companies exist in the first place - to incentivize people to engage in business ventures by creating a structure where you can try to make a successful business, and if it doesn't work, you don't end up losing your house. If I have venture capital, I can fund two separate startup businesses, and if one of them doesn't work out, I can rest assured that the other will be able to go forward without disruption. I'm therefore far more likely to start both businesses.

The "nice" thing to do? I guess... why not take that money and give it to the United Way, or doctors without borders? That would be nice.

Bankruptcy laws weren't drafted at random. There are deliberate policy choices made to balance the protection of creditors with the goals of the market. Claims for unpaid employee wages in bankruptcy get very, very high priority, whether it's a BAA process or a CCAA process. They certainly outrank shareholders; if they didn't get paid, then once this company filed for bankruptcy (or CCAA protection), I can pretty much guarantee that Beaton and any other equity investors got zero dollars out of it. The problem is that secured creditors still come first, and even they tend to get pennies on the dollar... there's often not much pie left for anyone else. That's a failed business.

If we wanted, we could make sure that every employee and creditor gets paid very easily - just pass a law that sends debtors, or the primary shareholder of a debtor company, to prison for not paying their debts. Problem solved! Wait, do you suppose that might discourage people from investing in private companies and starting businesses in the first place, thereby creating the jobs that created the debt these employees want to recover? Would it maybe stop people from buying shares in anything, if they could lose not only the money they invested but all the money in their bank account as well?

Now, if she just told everyone that she filed for bankruptcy and instead just absconded with a bunch of cash, then yeah, that's both illegal and criminal. Doesn't sound like it, though.

I hate to jump on the bandwagon but your post is so CHL of you. Take semantics that I addressed and write an essay on the semantics.

No one cares if this is legal. No one cares if it is smart or shrewd.

Fact of the matter is she owned and operated a company that didn't make good on its promises to its employees. Separate legal entity or not, not paying these people was a crappy thing to do if she had enough money to start a new business.

Originally Posted by nik-

Legal or not, she looks awful doing this and deserves any criticism.

This isn't the United Way, those people provided her services and she used corporate distinction to screw them.

I'm assuming her new place will fail too.

Precisely.

Originally Posted by Shazam

You're conflating two things: Money needed to start a company and ownership.

Yeah, she owns 50% of the new company. But you hardly need any money to do this. They probably did what everybody else does - say, 1000 shares at $1 each and so she spent $500 on her portion of the shares.

She probably has dick for free cash right now, so it's the other investors that plowed in seed money.

With that there's probably some conditions on her, like if she ####s this up everybody gets to chop off a finger.

No I'm not conflating anything. Starting a corporation doesn't cost that much money and I never said it did.

But starting a new restaurant costs money. You have to buy goods, hire staff etc. That stuff isn't free.

And even if she has other investors, I don't really care. The optics of the situation is that she has money but let her old business (which legally is separate, but really is hers and represented by her) screw over people.

Is it possible she's in financial trouble personally and can't afford to pay those people? Possibly. But the optics of starting a new business just look bad.

[northcrunk]

You can spin this all you want. The fact is I will not be visiting her establishments. I'm sure there are many more who would not either.

[nik-]

Originally Posted by CorsiHockeyLeague

It shouldn't look awful. She didn't get off on a technicality. This is the entire point of the concept of structuring a business as a corporation. Incidentally, it's not like she didn't lose a whole bunch of money too; she almost certainly did, though I have no idea how the company was funded.

At least the employees get $2k each (to the extent there's any money left in the bank account at all, which there usually is, because all of the assets have to be sold off). Any other unsecured creditors get zilch.

It should and it does.

[Shazam]

Originally Posted by Cecil Terwilliger

No I'm not conflating anything. Starting a corporation doesn't cost that much money and I never said it did.

But starting a new restaurant costs money. You have to buy goods, hire staff etc. That stuff isn't free

Yeah, no #### it ain't free. What your brain doesn't understand is that she's probably not the one putting money into the new business.

And even if she has other investors, I don't really care. The optics of the situation is that she has money but let her old business (which legally is separate, but really is hers and represented by her) screw over people.

She doesn't have money. She even said it herself, she's essentially an employee at the new company. The owners get to suck out her cheese knowledge and she has no say in, well, anything.

Is it possible she's in financial trouble personally and can't afford to pay those people? Possibly. But the optics of starting a new business just look bad.

You are a very, very confused person.

[Shazam]

And man, if your standard for not patronizing someone's establishment is that they didn't fully pay their employees for whatever reason, I suggest you stay away from every ####ing non-chain restaurant in the "inner city".

[Fuzz]

Originally Posted by Shazam

Yeah, no #### it ain't free. What your brain doesn't understand is that she's probably not the one putting money into the new business.

She doesn't have money. She even said it herself, she's essentially an employee at the new company. The owners get to suck out her cheese knowledge and she has no say in, well, anything.



You are a very, very confused person.

Doesn't the article say she is a 50% owner of the new company?

EDIT:
yup:

Corporate registry searches, however, reveal that Mabou Cheese + Bar is a trade name belonging to a corporation named Janice Beaton Fine Cheese, Inc.
Janice Beaton is listed as the sole director of that company, which has three voting shareholders: Chinook Arch Productions Ltd. (15 per cent), George Baptist (35 per cent) and a numbered company named 1180264 Alberta Ltd. (50 per cent.)
The numbered company has just one registered shareholder: Janice Beaton.

[troutman]

Originally Posted by Shazam

Yeah, no #### it ain't free. What your brain doesn't understand is that she's probably not the one putting money into the new business.

Who is going to invest in a restaurant (besides a relative or friend)? Such a bad bet.

http://www.businessinsider.com/why-r...o-often-2014-2

[According to a frequently cited study by Ohio State University on failed restaurants, 60% do not make it past the first year, and 80% go under in five years.]

http://www.bloomberg.com/news/articl...nancial-advice

[CorsiHockeyLeague]

Originally Posted by Cecil Terwilliger

I hate to jump on the bandwagon but your post is so CHL of you. Take semantics that I addressed and write an essay on the semantics.

Let me just leave it at this bit of irony: you clearly do not know what the word "semantics" means.

/InigoMontoya

[Cecil Terwilliger]

Originally Posted by Shazam

Yeah, no #### it ain't free. What your brain doesn't understand is that she's probably not the one putting money into the new business.

She doesn't have money. She even said it herself, she's essentially an employee at the new company. The owners get to suck out her cheese knowledge and she has no say in, well, anything.



You are a very, very confused person.

You have no idea how her new business works. You are making wild assumptions without evidence then acting pompous to boot. It really is bizarre.

Originally Posted by CorsiHockeyLeague

Let me just leave it at this bit of irony: you clearly do not know what the word "semantics" means.

/InigoMontoya

On the other hand, I think semantics may be the only word you do know.

[Cappy]

As an officer/director of the "Farm Company", she does have some obligations to employees, but as the article notes, this becomes a little grey in some cases.

[cracher]

Agree that Farm article is terrible. The "poor optics" exists only because of irresponsible reporting. This city is overflowing with accounts receivables gone bad. Don't get why they chose to spotlight her and not one of the many medium-sized EPCs that did a lot worse than $3k.

[TheAlpineOracle]

In my opinion, the whole bankruptcy/insolvency process is easily one of the shadiest process in the legal system. Passing the buck on to other people and leaving them holding the bag while beneffiting mostly those who have created the problem/debt in the first place, and the people who are administering the process on the debtors behalf. In my experience, even the professionals that work in that world (trustee, receiver, etc. ) are of a lessor standard than most in the advisory world.

So sure, CHL you may be right that from a legal standpoint that nothing is wrong here, but from a moral standpoint a lot do not agree with it at all, and people have every right to hold the new business accountable since its essentially the same owner and the same location. I guarantee you that article has cost that new business more money than had they just done the right thing and made the past employees whole.

[Fuzz]

If it had been a "real" bankruptcy, would she have had to liquidate all the equipment to pay creditors? It sounds like she folded the company, transferred everything to the new company and kept going with a new name.