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Banks Shut Down Race Face Operations

Published March 14, 2011

NEW WESTMINSTER, B.C. (BRAIN)—Running into financial turmoil, Canadian component brand Race Face is no longer in business. A receiver took over operations on Saturday and has shut down the company. Race Face’s bankers, Scotia Bank and Roynet, appointed Grant Thornton Limited as the brand’s receiver over the weekend.

In a letter to Race Face employees dated March 14, Grant Thornton Limited announced that it was terminating all Race Face employees at its New Westminster factory, and at its operations in Taiwan today.

"As the receiver will be shutting down the operations of Race Face Components Inc. immediately, your continued employment is no longer required and, therefore, the receiver on behalf of Race Face Components Inc., hereby terminates your employment, effectively immediately," the letter stated.

Calls seeking comment from Grant Thornton Limited were unanswered.

“It came as a big surprise to all of us,” said John Pentecost, who was Race Face’s component/protection marketing and product manager. “There were about 50 people laid off here in New Westminster today and we were told that another 20 people in Taiwan were also terminated.”

Pentecost said the banks had begun to require their sign-off on all outgoing funds about four weeks ago. At the time payroll payments were current, although many of the employees hadn’t been reimbursed for traveling expenses and company payments into the Canadian healthcare system were reportedly behind.

“For some of the people traveling to Taiwan and down to the States on sales calls, they are owed $3,000 or more of traveling expenses. I’m owed about $2,000, none of which we will see,” Pentecost said.

Race Face officials met with creditors and its receiver today. Officials at Grant Thornton said they intend to dispose of Race Face as a single entity and may rehire back some essential employees to assist in the sale of the company.

—Matt Wiebe
mwiebe@bicycleretailer.com

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