According to an affidavit, Erwin Hymer Group North America may have “materially exaggerated” and “mischaracterized” the profitability of the business before going into receivership Friday – a practice that may have been ongoing for years.
The company had more than $300 million in liabilities before terminating all employees.
This story by James Jackson originally appeared on TheRecord.com.
That’s according to a sworn affidavit from Mark Gottlieb, president and senior adviser on strategy, mergers and acquisitions and corporate finance for Corner Flag, a U.S.-based limited liability company that acquired shares of the RV maker following its exclusion from the multibillion-dollar takeover of its parent company earlier this year.
“The profitability of certain (Erwin Hymer Group North America) entities was materially exaggerated or otherwise mischaracterized,” he said of early results of an ongoing investigation into the company’s books, “and such financial irregularities were pervasive throughout (the company) and may have pre-existed Erwin Hymer Global Group’s acquisition.”
The affidavit was among hundreds of pages of documents filed as part of the receivership process Friday and acquired by The Record.
“It appears that these financial irregularities materially impacted the viability of the business,” Gottlieb said.
The company terminated its entire workforce Friday. They were not represented by a union.
Financial firm Alvarez & Marsal Canada has been appointed receiver of the company, including its assets and property. The firm is known for assisting with corporate restructuring and turnaround management.