Bob Mackin
The company that bought the Georgia Straight newspaper in 2022 has been ordered to pay $270,819.02 in unpaid wages to a group of nine former employees.
Overstory founders Farhan Mohamed (left) and Andrew Wilkinson (OMG)
Employment Standards Branch delegate Shannon Corregan ruled April 8 that Overstory Media Inc. must pay the sum — plus a $500 administrative penalty —for wages, vacation pay, length of service compensation and interest within five days.
“Pursuant to section 97 [of B.C.’s Employment Standards Act], the liability for any outstanding wages rests with the purchaser, even if that liability was initially incurred by the vendor,” Corregan wrote.
Overstory bought the Vancouver Free Press [VFP], the Georgia Straight’s parent company, on Sept. 22, 2022 from Wei Lin of Lightheart Management Partners (LMP) for $400,000. Corregan ruled that was both the execution date and closing date of the asset purchase agreement.
Lin represented the secured creditors of the Georgia Straight’s bankrupt owner Media Central Corp. Inc. (MCC) and VFP. His agreement with Overstory included a clause that stated “commencing on the closing date, the vendor shall cause the termination of all individuals currently employed by VFP.”
First cover of The Georgia Straight, May 5, 1967 (Georgia Straight)
But, Corregan wrote,“there is no evidence that VFP’s remaining employees were terminated on or before Sept. 22, 2022. The remaining employees were not terminated until Sept. 27, 2022.”
On the latter date, former MCC president Kirk MacDonald, who had remained president of VFP, held a virtual meeting with Georgia Straight staff to tell them they were laid-off as of 11 a.m. that morning. He also issued them a letter.
MacDonald’s letter said that VFP had been “liquidated per the Media Central bankruptcy proceeding and the assets have been sold to a local publisher.”
“However, there is no evidence that VFP was ever formally dissolved or wound down,” Corregan wrote.
The ruling said that VFP remains active in the corporate registry and there is no evidence it is undergoing bankruptcy or receivership, although it is in the process of being dissolved.
The Georgia Straight continues to publish online and in print. The 57th anniversary of its 1967 debut edition is May 5.
In its response to the investigation report, Overstory told Corregan that it did not employ the complainants and none of its directors made a decision that contravened the Act.
“Since the disposition of VFP’s business occurred on Sept. 22, 2022, and its employees were not terminated prior to the disposition, Overstory is liable for the wages owing to nine of the complainants,” Corregan concluded.
Georgia Straight’s 50th anniversary edition cover (Georgia Straight)
Dan McLeod, who founded the weekly newspaper in 1967, sold VFP for $1.25 million at the end of February 2020 to MCC, a few weeks before B.C. officials declared the pandemic emergency. A core group of employees remained on the job, some in the office and others worked from home, under the direction of MacDonald.
By November 2020, MCC was in financial difficulty and defaulted on payments to creditors in February 2022. Lin was appointed a nominee by debenture holders to enforce their security against MCC and VFP. At the end of March 2022, Lin’s company, LMP, issued a news release that said MCC filed an assignment into bankruptcy [with $2.2 million in liabilities] but subsidiaries VFP and NOW Central Communications Inc. of Toronto would continue regular publication. It also said MacDonald, would remain president of VFP and NOW.
The ruling further stated that MacDonald informed remaining VFP employees in a June 29, 2022 letter that VFP was unable to meet payroll obligations that week, “due to the actions of a third party.” His letter said the company was attempting to “free up funds” for payroll and he offered temporary layoffs, which some employees took. Others continued to keep the Georgia Straight publishing under his direction, without pay, while the company sought a new owner.
Overstory has not responded for comment.
Overstory announced the purchase on Sept. 27, 2022. Its founders, entrepreneur Andrew Wilkinson and former Daily Hive editor Farhan Mohamed, gained international media attention in May 2021 when Overstory heralded an ambitious plan to hire 250 reporters and launch 50 outlets by 2023. However, the company’s website lists 14 publications, 11 of which are B.C.-based. It also publishes titles in Calgary and Halifax.
In late March, The Logic reported that former Jim Pattison Group chief operating officer Glen Clark had replaced Mohamed as Overstory’s top executive on a temporary basis in order to turn the company around. Clark was the B.C. premier from 1996 to 1999. Early in his two-decade career with Pattison, Clark launched the 24 Hours Vancouver daily newspaper in partnership with Quebecor.
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