Morris Industries has been granted an order by the Court of Queen’s Bench for Saskatchewan extending their stay of proceedings, enabling Morris Industries to continue with its efforts to restructure its business and financial affairs. This includes obtaining approval to solicit proposals from prospective strategic and financial parties to acquire or invest in the Morris Group.
According to a report from Glacier Farm Media, downsizing and staff cuts are coming for Morris Industries as the company enters creditor protection due to a “liquidity crisis.”
The Court of Queen’s Bench in Saskatoon approved the Morris Group’s Jan. 3 application, which stays any proceedings or actions against the company until Jan. 18 at the earliest.
Morris, which sells through dealer networks in Canada, the U.S., Australia and Eastern Europe, pointed in its Jan. 3 application to “significant losses” in recent years due to “the unfortunate combination of multiple factors.”
Listed first among those factors were rising overhead and production costs from expanding the business and introducing both its proprietary new ShieldCore welding technology and, in 2018, a new product line, the Quantum Air Drill.
Morris started short-term cost-cutting in September 2019, including “partial shutdowns” at Yorkton and Minnedosa as well as salary cuts and work-share programs, he added.
As of now, said Morris Chief Operating Officer Kevin Adair, the company’s restructuring strategy may also include, among other options:
- consolidating manufacturing into a single plant and selling off other facilities and equipment;
- auctioning off “older-generation” products and shuffling inventory between dealerships to cut its floor-planning costs;
- relocating to a smaller head office and/or cutting head office and support staff positions;
- winding down a company-owned equipment dealership at Virden, Man.; and/or
- working with its secured creditors and its court-appointed monitor, Alvarez and Marsal Canada, on a “sale and investor solicitation process.”
As of Jan. 3, Adair said, the Morris Group has 134 employees, and “further reductions” to its workforce will be necessary.