The New Brunswick government is seeking a court-appointed receiver for Industrial Rail Services, saying the company has failed to repay its loans, according to court documents. The provincial government has said it backed the company with $22.5 million in loans and guarantees.
Industrial Rail fell behind on the contract, originally saying it was trying to work around problems that engineers found in the cars’ framing. In the court documents, Industrial Rail blames VIA for the delays, alleging it wasn’t allowed full access to inspect the cars before taking on the contract. “All delays were as a result of the actions and inactions of VIA, over which Industrial had no control, namely VIA’s change of priorities and its failure to meet court appointed deadlines,” the court documents state.
Industrial Rail also claims that “as a result of the actions of VIA, Industrial has suffered a loss of assets, profit, and opportunity.” One lawsuit, dealing with the contract to refurbish 10 Renaissance cars, totals about $5.6 million. The other claim, which covers a second contract to refurbish LRC cars, totals about $26 million.
The receivership case is due to return to the courts in the coming weeks.
