Winnipeg Free Press
New ownership group takes over
Thursday, March 30th, 2006
By Dan Lett
SALISBURY House Restaurants has a new ownership group, and a new lease on life, after a critical meeting of shareholders yesterday approved a plan to stave off receivership of the 75-year-old diner chain.
Entrepreneurs David Wolinsky and Costas Ataliotis, who spearheaded the drive five years ago to return Salisbury House to Manitoba ownership, were officially removed as officers and directors of 4328796 Manitoba Ltd., a numbered company that owns 80 per cent of the restaurant chain.
In their place, shareholders elected Earl Barish, owner of the Dickie Dee ice-cream empire, as president and chief executive officer. Harris Liontas, CEO of information technology firm Novra Technologies, was elected secretary treasurer.
Neither Ataliotis nor Wolinsky attended yesterday's meeting.
Barish and Liontas will be joined by criminal lawyer Hersh Wolch and Lorne Saifer, former manager of the rock band The Guess Who, as directors of the numbered company.
A meeting of the shareholders of Salisbury House Restaurants Canada -- the company that operates the restaurant chain -- could be held as early as next week. Barish said in addition to the positions they have taken with the numbered company, it is expected he and Liontas will take on roles as officers and directors of the operating company.
Barish said a plan was also approved to inject $500,000 into the company to relieve some of its debt, which some shareholders have estimated at more than $4 million.
Astra Credit Union served notice earlier this month that it was prepared to put Salisbury House into receivership unless steps were taken to address the mounting debt load.
Although Astra has not responded officially, Barish said he believes the new ownership group and cash infusion will stave off the receivership. Astra officials did not return calls yesterday.
Barish noted, however, there are still a number of hurdles for the new ownership group.
Those shareholders who want to play a role in reviving the company have been asked to step in and pay a share of the cash injection, Barish said. Shareholders who do not pay up could see their stake significantly diminished or forfeited.
One of the more intriguing aspects of yesterday's events is the likelihood that Crocus Investment Fund could become the largest individual Salisbury House shareholder. This comes as a result of the fund's investment in a related company, Maple Leaf Distillers.
Crocus invested $7.4 million in Maple Leaf between 1999 and 2004. In addition, Crocus guaranteed a $1-million line of credit for Maple Leaf at Astra Credit Union.
As security for the guarantee, Maple Leaf lodged with Crocus shares in Salisbury House Restaurants of Canada, estimated to be worth about 38 per cent of the company.
dan.lett@freepress.mb.ca
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