Glacier FarmMedia — An Alberta court has ruled that Sunterra owes Compeer Financial $35 million after undertaking fraudulent behaviour in its U.S. operations.
The Sunterra group of companies got its start in the hog breeding business in 1970 and later expanded into meat processing, food processing and retail. The lawsuit relates to U.S. hog operations which were later sold to Tyson Foods.
King’s Bench justice Michael Lema, in a written decision, found that Sunterra and Ray Price participated in a cheque-kiting scheme that cost the American lender that amount.
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“I find that cheque kiting occured here, that the Canadian Sunterra entities involved fraudulently misrepresented that south-going cheques were anchored by sufficient funds to be honoured, that those entities intended Compeer to rely on those misrepresentations, that Compeer so relied, and in doing so suffered losses of approximately $35 million USD, for which a summary judgment in favour of Compeer is appropriate,” he wrote.
“I also find Mr. Ray Price, president and a director of those entities, personally liable, with those entities, for those losses.”
The scheme came to light last year after Compeer froze the accounts associated with Sunterra’s U.S. companies and alleged that kiting was occurring.
Lema’s decision noted that in 2024, about $6.3 billion in intercompany transfers were moved back and forth.
Sunterra has remained open while operating under the Companies’ Creditors Arrangement Act and trying to restructure.
In Canada, Sunterra’s lender, National Bank, also filed a claim against the company, but Lema ruled it couldn’t be proven.
