Seaway investors to get $7.5 million back by Christmas

CORNWALL — The city of Cornwall has agreed to pay Seaway Valley Farmers’ Energy Co-operative any money it earns if the city can sell the former Seaway building on city land. The agreement stipulates that if the building is sold within the next year, all money earned will go to Seaway. If it’s sold after that, the city pockets the money. The 8,000 sq. ft. building cost the farmer co-operative $450,000 to construct.

The co-operative (representing shareholders) and Seaway Grain Processors (managers of the proposed plant) filed for insolvency in October. The co-operative owes $432,000 to the province for a grant it had received. If the province demands that the co-operative returns the $3-million capital grant held in escrow, the co-operative will be bankrupt, Seaway Grain Processors president Alain Leduc said.

Meantime, about 1,000 investors who bought $7.5 million in shares in Seaway in 1999 will likely be receiving a cheque before Christmas as those shares have also been held in an escrow account. For information, call escrow agent Adam Sherwood at 613-938-3330.

Seaway’s hopes of an ethanol plant were dashed last January when the city of Cornwall decided to take land back from Seaway. The city of Cornwall has no plans for the land. But other problems had been mounting. Anticipated funding of $10.5 million from Natural Resources Canada had expired, meaning those funds were no longer available. At the same time, the cost of the project was rising. An agreement with a contractor in 2004 increased $6 million from November 2004 to June the following year.

The ethanol processing plant was expected to cost $51.5 million. Seaway Grain Processors had spent $5.4 million in hopes of getting the project off the ground.