Dartmouth furniture maker settles finances

Scanwood Canada Ltd. in Dartmouth avoided bankruptcy Tuesday.

The company's banker, the Royal Bank, unexpectedly called a $2-million loan. In response, Scanwood had filed notice it would seek creditor protection.

But the situation was resolved Tuesday.

"We have withdrawn the notice that we put forward to the court this morning," Bo Thorne, company president and chairman, told the company's 248 employees.

"We have solved the situation and the bank has withdrawn, as well. The matter is in forbearance right now. So it's non-news."

The company is the middle of a $6-million modernization to make it more efficient at producing 900,000 dressers a year for IKEA, its sole customer.

Thorne said that with IKEA rebounding from the recession, the outlook is good.

Still, he spent a lot of time calming anxious suppliers — meeting with workers late Tuesday afternoon to update them on the financial situation.

"We have our staff, a great team, our customers and our suppliers and our creditors firmly behind us with this plan. We have had a six-month delay with this plan, but we are doing fine and we have no intention of filing for protection," Thorne said.

In her two decades years at Scanwood, employee Mary Vandorpe has seen plenty of changes, but perhaps none as important as the modernization.

"They are trying to implement many machines throughout the plant. I can see light at the end of the tunnel, but it has been a rough road," she said.

"This is my livelihood. I've been here for 20 years. It would be difficult to find another job right now."

Nova Scotia taxpayers also have something at stake — the provincial government lent Scanwood $4.5 million last year to help pay for the modernization.

The arrival of more labour saving machines has meant the layoff of 14 workers at the plant. They will lose their jobs at the end of March.