ServiCom assets go to Iowa businessman for $1.5 million in court auction
Published Tuesday, December 18, 2018 6:25PM AST Last Updated Wednesday, December 19, 2018 7:39AM AST
HALIFAX -- The assets of a shuttered Cape Breton call centre have been awarded to an Iowa-based businessman for $1.5-million, a deal that will likely save hundreds of jobs in Cape Breton.
Nova Scotia Business Minister Geoff MacLellan confirmed Tuesday that Anthony Marlowe of Marlowe Companies Inc. (MCI) outbid two other interested buyers for the assets of ServiCom Canada during an auction that was part of bankruptcy proceedings in the United States.
The call centre in Sydney, N.S., was abruptly closed Dec. 6 after ServiCom's U.S. parent, JNET Communications, filed for bankruptcy protection.
Almost 700 people immediately lost their jobs.
On Tuesday, MacLellan said the American judge overseeing the bankruptcy proceedings in New Haven, Conn., was expected to finalize the deal for four ServiCom contracts on Wednesday, though Dec. 21 has been set as a deadline.
"At this point, there is still a court process that has to unfold," said MacLellan.
MCI Canada later issued a statement saying the call centre will reopen as early as Jan. 2, 2019 under a new name: The Sydney Call Centre Inc. The company also confirmed that MCI will enter a nine-year lease for the shuttered facility.
However, the company said ServiCom will be responsible for covering unpaid wages and other liabilities.
The shutdown followed weeks of pay delays. Most of the workers are owed about four weeks in back pay.
Marlowe said it was clear that the bankruptcy proceedings in the United States were unlikely to produce any money for the workers. He said his company would offer sign-on and retention bonuses, but no figures were mentioned.
"We hope that this will help lessen some of the financial impacts of the closing," he said in a statement.
Marlowe's company was in the process of buying the call centre's assets when it was shut down by the bankruptcy proceedings.
He said his company will provide new and ongoing employment for the Sydney area. Again, no numbers were mentioned.
"We are in a unique position to be able to quickly bring jobs back to Sydney, provide a valuable service to customers and add talented employees and capacity to the MCI portfolio," Marlowe said.
"Expanding into a new country in less than 30 days is a big undertaking, but we have a great team and technology in place to get it done ... We have every confidence that the team in Sydney will further fuel our organization's success."
MCI's parent company, Mass Markets, operates four contact centres in Iowa and South Dakota. MCI, headquartered in Iowa City, Iowa, employs about 2,000 people at operations in Iowa, Georgia, Florida, Massachusetts, New Hampshire and South Dakota.
Cecil Clarke, mayor of the Cape Breton Regional Municipality, said the pending sale should provide a sense of relief for former ServiCom workers, who had worked at a profitable enterprise.
"The speed at which the sale moved through the complications of U.S. bankruptcy proceedings shows Anthony Marlowe of MCI Canada ... is determined to pick up where they left off," Clarke said in a statement.
Clarke also commended Cape Bretoners for offering support for their neighbours.
"From donations of money and food to concerts, to haircuts and free transit ... people have been pulling together to help their neighbours get through this uncertain time," he said.
"I understand that the sale doesn't erase the stress and fear the ServiCom employees have lived through these past weeks, but we can at least move into the Christmas season with a new sense of peace and joy knowing that this dedicated group can get back to work as soon as possible."
ServiCom's Sydney operation first opened under different ownership nearly 20 years ago.
The call centre provided customer support to major firms, such as OnStar Corp., a subsidiary of General Motors, Sirius XM Satellite Radio, AT&T Inc. and Allstate Insurance company.