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This Company is NOT the La cie McCormick Canada Company that operates in London, Ontario, Canada.

McCormick Manufacturing Company Limited

McCormick - 1854 to 1937

Beginning in London, Ontario, Canada, in 1854, the one person McCormick business was started by Thomas McCormick (b. July 1, 1830. d. June 6, 1906), a financially prudent and innovative entrepreneur; a local politician, an active member in the Methodist Church, and a philanthropist. Thomas McCormick built his business on the basis of integrity, industry, and fair treatment of his employees.

Thomas McCormick had 5 employees by 1858 at a location on the north side of Dundas Street between Clarence Street and Wellington Street. His company name, Dominion Steam Confectionery and Biscuit Works, was a name that was obviously intended to emulate rival Daniel Simmons Perrin's established Forest City Steam Confectionery and Biscuit Works. McCormick made the move a short time later to the corner of Clarence Street and Dufferin Avenue, today a parking lot, across from the still standing Bell Telephone Company building located at 479 Clarence Street.

In 1875, approximately 100 people were employed by McCormick Manufacturing Company Limited including production workers, salesmen, and agents. A new factory at the south east corner of Dundas Street and Wellington Street, today 275 Dundas Street, designed by architect Samuel Peters, was constructed in 1878 for the T. McCormick Biscuit Company. By July, 1879, the business had become the McCormick Manufacturing Company Limited, and the Company sold its products throughout southwestern Ontario. Expansion of the factory happened more than once as business increased. When the 20th century came, the Company was selling its products throughout Canada, and its product advertisements appeared in many national newspapers. Expansion of the factory happened more than once as business increased.

After Thomas McCormick died in 1906, three of his sons, Thomas P. (b. July 23, 1873. d. March 31, 1917) George (b. March 24, 1860. d. May 25, 1936), and Frank (b. [unknown by author] d. June 8, 1965), who had for years been active participants in the Company with their father, took over the Company after they bought the business from the Estate. Son, Thomas P. McCormick, traveled to many confectionery and bakery plants around the world in the years following gleaning what was the best in the industry at the time regarding construction and production with the intention of building a new modern factory.

Always quick to apply the most up-to-date confectionery production methods available, the McCormick Manufacturing Company took its case to the Supreme Court of Canada as the Defendants in 1908-09 regarding McCormick's alleged patent infringement with respect to a new candy-pulling machine McCormick was operating in its factory. The Supreme Court ruled in favour of McCormick judging no patent infringement had taken place.

Abundant and more dependable electricity came to London in 1910 via the new 110,000-volt southwestern Ontario bulk transmission lines from the hydro-electric power generation plant at Niagara Falls, Ontario, and this initially lower cost new provincial monopoly produced electricity greatly aided industrial growth in the City of London as manufactures could produce more goods for less money.

Continued success, along with fixed-rate taxes and temporary tax exemptions offered by London City Council to encourage industrial development of newly serviced lots, and the need to relocate once again was perfect timing. Planning for the construction of a massive new factory began after the purchase of approximately 100 acres of newly serviced lots in 1913, called Priests' Swamp on early maps, located in what was then the eastern edge of the City.

Designed by the architect firm Watt (John Macleod) and Blackwell (Victor Joseph) for the Thomas McCormick Company, the new factory was constructed by the firm of Frost and Winchester of Windsor, Ontario at 1156 Dundas Street East, at the corner of Dundas Street East and McCormick Boulevard, named for the new factory. The factory may have been completed on December 17, 1913. This approximately $1,000,000 (about $20,450,000 in 2013 money) state of the art, 4-storey, (basement and fifth level tower excluded) completely fireproof building of brick construction and terra cotta design was one of the largest, modern, most sanitary, and most efficient factories of its kind in North America.

Originally made with: 1,500,000 bricks, 800 tons of steel, 100,000 bags of cement, 25,000 loads of gravel, 40,000 feet of glass, 8 tons of putty to glaze the windows, 450 tons white terra cotta and tile, and 150,000 feet of maple flooring. Lawns, trees, flower beds, and shrubs were planted on the grounds in an almost park like manner. The factory had a size of approximately 354 feet long and approximately 91 feet wide, with 8 acres of floor space, including biscuit packing rooms 90 ft by 210 ft, and 600 ft long stock rooms. Plans were included in the design for ample expansion of the factory in the future without interfering with production. 

Each piece of machinery brought from the previous factory location was planned for so well in the design of the new factory that McCormick made the move to the new factory without the loss of production. A very sophisticated and highly efficient steam power system ran most of the plant operations. The factory had its own supplementary combination coal powered electric and steam generating station at the rear of the factory connected by an approximately 150 foot underground tunnel; however,  the factory was designed to take full advantage of the emerging provincial hydro power.

With its bright white tera cotta tile on the outside, the new McCormick's plant outwardly expressed the exceptional sanitary conditions of the inside. The large number of external windows, covering 68 percent of the outside surface, gave the building the description "The Sunshine Palace" because even the deep interior of the factory was flooded with bright sunlight during the day. This architectural style of the time increased worker morale and productivity, and also improved worker safety. McCormick's plant was described as "Our New Snow White Sunshine Biscuit And Candy Factory" on some early product packaging with a large illustration of the factory. 

The main entrance lobby was tile floor, and oak trim. Around the lobby was leaded-glass designed built-in showcases that displayed examples of all the McCormick's brand confections. The quarter-cut oak finished general and private offices were on the other side of the lobby, and the employee's entrances were on either side of these. The mixed candy department, stock rooms, cold storage, and the oven room completed the first floor. On the fifth floor located in the tower was the reception room containing wicker furniture for the seating of factory guests.

McCormick's factory was a leader in modern automated packaging and labelling machines allowing for biscuit products to be produced and packaged for shipping without ever being touched by the hands of the factory workers. From the bakery ovens on the first floor, automatic conveyors carried the baked biscuits to the fourth floor packing rooms, and then the conveyors brought the packaged product to the shipping rooms on the first floor. Automation brought flour that already been automatically weighed, sifted, and blended to the dough mixers. One worker could handle almost two tons of dough in a tub himself with the use of a mono-rail conveyor. All raw materials were automatically placed in their desired locations after being taken from their cars without manual labour. Production levels were 135,000 lbs of candy and 100,000 lbs of biscuits per regular working day.

Factory operations were connected to the essential railway, that allowed for the transportation of goods all over Canada, with spur lines traveling to the rear of the plant from the nearby Canadian Pacific railway. Two rail sidings travelled between the rear wings of the factory, and here freight cars were loaded with finished product from the shipping rooms on the first floor. In later years, McCormick's built up a fleet of its own trucks to deliver its product across Canada. One truck in McCormick's fleet was a novel electric truck that ran with the power of forty-four batteries, and was plugged in at night in the garage to recharge. 

The modern factory was equipped with such almost unheard of at the time employee amenities as: a large serve-self dining room (cafeteria) for the seating of 600 employees (expanding to 1500 employees in later years), a library, shower baths, medical facilities, locker rooms, rest (break) rooms, and a modern gymnasium. A baseball park, bowling greens, a tennis court and croquet grounds were provided outside for the enjoyment of the McCormick workers. The McCormicks gave instructions that every possible device be provided that ensured employee safety and comfort, and the handling of finished product and raw materials was the most sanitary.

A Notable Example of Factory Construction

Abundant Daylight, Improved Sanitation and Comfort of Employees Are Features of This Building

McCORMICK MANUFACTURING CO. [1913 Factory] 

Architects, Watt & Blackwell, London, Ont.

Brick, Chatham Brick Co., Chatham, Ont.

Boilers, Leonard & Sons, London, Ont.

Consulting Engineer, H. P. Elliott, London, Ont.

Casements, Trussed Steel Concrete Co., Walkerville, Ont.

Chimneys, Custodis Canadian Co., Toronto, Ont..

Chimneys, Weber Chimney Co., Chicago, Ill.

Electric fixtures, Geo. J. Beattie, Toronto, Ont.

Electric Fixtures, Crouse-Hinds Co. of Canada, Toronto, Ont.

Electric Wiring, etc., Westingohuse Co. of Canada, Hamilton, Ont.

Electric Conveyors, Thos. L. Green Co., Cincinnati, Ohio.

Electric Conveyors, Canadian Mathews Co., Toronto, Ont.

Elevators, Otis-Fensom Elevator Co., Toronto, Ont.

Fire Doors, Richards & Wilcox, London. Ont.

Fire Doors, Meeker & Co., New York City, NY.

Fire proof Partitions. Alabastine Co., Paris. Ont.

Fire Extinguishers​, General Fire Extinguisher Co., Toronto, Ont.

Flooring, Wm. Leslie Co., Boston, Mass.

Heating Specialties, Darling Bros., Montreal, Que.

Interior Fittings, Canada Office & Desk Co., London, Ont.

Lockers, Denis Wire & Iron Co., London, Ont.

Overhead Conveyors, Herbert Morris Crane & Holt Co., Toronto, Ont.

Ovens, Walter Baker Co., New York City, NY.

Paints, Kiandham-Henderson Co., Montreal, Que.

Plumbing Fixtures, Empire Manufacturing Co., London, Ont.

Pipe Covering, H. W. Johns-Manville Co., Toronto, Ont.

Roofing, D. H. Howden, London, Ont.

Stokers, Murphy Iron Works, Detroit, Mich.

Structural Iron, Sarnia Bridge Co., Sarnia, Ont.

Terra Cotta, N. Y. Architectural​ Terra Cotta Co., New York City, NY.

Temperature Regulators, Power Regulator Co., Toronto, Ont.

Source: Construction: a journal for the architectural engineering and contracting interests of Canada, April, 1916.

Employees could purchase meals at cost in the dining room where 250 to 300 hot meals were served each day in the early years by a full time staff of 7 during lunch and rest periods.

Early Menu and Price (Approximate price in 2014 money)

Stewed prunes 2¢ (43¢)

Soup and crackers 3¢ (64¢)

Sandwiches 3¢ (64¢)

Pork and beans 3¢ (64¢)

Tea per cup 2¢ (43¢)

Coffee per cup 2¢ (43¢)

Milk 1 pint cup 3¢ (64¢)

Potato and butter 2¢ (43¢)

Hot OXO 3¢ (64¢)

Bread and butter 1¢ (21¢)

Pie 4¢ (85¢)

Tea per mug 3¢ (64¢)

Meat pie 6¢ ($1.28)

Scalloped potatoes 3¢ (64¢)

Source: Salesman's binder, McCormick's Limited c. 1952.

From balconies on the second floor, visitors to the factory could view the oven room. The plant was designed with long corridors from one end of the building to the other that had glass partitions allowing visitors to view plant operations without entering the rooms. Visits from the public to the factory were encouraged.

McCormick's main London competitor, D.S. Perrin and Company Limited, was bought by the McCormick Manufacturing Company Limited in 1926, which subsequently was renamed the Canada Biscuit Company, and afterward changed its name to McCormick's Biscuits and Candies, and thereafter to simply McCormick's Limited. McCormick's expanded with the acquisition of D.S. Perrin and Company Limited to having branch facilities across Canada in: Calgary, Hamilton, Kingston, Moncton, Montreal, Nanaimo, Ottawa, Port Arthur (now Thunder Bay) St. John, Toronto, and Winnipeg. The success of the McCormick family company continued for some 30 years.  

George Weston Limited - 1937 to 1990

In 1937, the Company was sold to competitor George Weston Limited. McCormick's Limited may have been in a difficult financial state because of the severe 1930s depression, but the McCormick name and brand was retained along with the business after the sale.

Competitors such as troubled McCormick’s Limited of London, Ontario, were bought out and factories that would have closed their doors stayed open.

While Garfield [Weston] built new factories, his basic strategy was to acquire established companies through friendly merger and acquisition. Time and again, Weston approached the heads of family-run firms, often generations in business, which were losing money and, with deference and respect, asked them to join him.

Source: Britain’s Biggest Baker - George Weston Limited official history. 

The last surviving of the three McCormick sons, Frank A. McCormick, was President of the Company from 1920 to 1965. Frank had purchased other holdings and continued to hold an interest in the Company until his death in 1965. James Middleton, General Manager in 1967, had 40 previous years with the Company. The McCormick's factory would employ approximately 1300 people in 1967, many employed for 25 years or more, and the Company became an industrial titan of the city.

1858: 5 employees

1875: 100 employees

1913: 429 employees

1952: 1148 employees

         Source: Salesman's binder, McCormick's Limited c. 1952. 

McCormick's, makers of fine biscuits and candies, had been in operation for nine years when Canadian Confederation came into being in 1867. Since then McCormicks has expanded with our country until today its biscuits and confectionery plant in London is the largest under one roof in Canada.

Source: McCormick's advertisement in May Court Cook Book, London, Ontario, 1963.

Treating employees with fairness by the Company, and loyalty to the Company by employees, were always important at McCormick's. Still without a unionized workforce in 1952, in 94 years no labour dispute could not be worked out between McCormick management and employees at the conference table. Employees had generous sick, hospitalization, life insurance, and pension benefits in 1946.

Anyone with 25 years of employment or more with McCormick's could join the Quarter Century Club where the employee would receive a cheque from the Club on becoming a member, and would be eligible for participation in all Club social activities. The Quarter Century Club had 92 active or retired employees in 1952.

A pioneer of industrial medical services, the McCormick's factory's medical facility was fully equipped to handle anything from administering an Aspirin® to an ambulance. A full time registered nurse was on duty at all times, and a physician, who was not in private practice, was on call for consultations. Complete medical records of employees were kept on file, and an average of 50 employees a day would seek some kind of medical attention.

Very few constructional changes were required to the factory even 40 years after construction was completed because of the careful planning that went into the original factory for future expansion. The factory was designed to be expanded with the business, additions were added to the factory, and the production machinery, such as ovens, kept as modern as possible. An infrared lamp system that reduced the drying time of candy from 24 hours in the early years to 60 seconds in 1952 was designed and built by McCormick's own engineers. In 1952, the McCormick's factory was producing a variety of confection and baked goods as:

Arrowroot

Black Beauty

Bon Bon

Butter Bix

Butter Carmel

Cameo Creams

Chocolate Peppermint Patties

Chocolate Sensations

Elite Cream Fingers

Fruit Rolls

Gold Seal chocolates and biscuits

Granny's Cookies

Gums

Humbugs

Jelly Beans

Jersey Cream Sodas

Jubes

Kisses

Malted Graham Wafers

Mac's Best

Midget Humbugs

Molly 'O

Peanut Butter Crunch

Rainbow Carmel

Raisin Cookies

Royal Lunch Bar

Social Tea

Scotch Mints

Sun Wheat

Varsity Chocolates

Very Thin Saltines

Hard flour from Western Canada with its higher gluten content was used for the hard biscuits, and soft flour from Ontario with its lower gluten content was used for the finer texture soft biscuits. The right combination of ingredients, the proper oven heat, and baking time was the key to making McCormick's popular biscuits. The Company won many awards over the years for food sanitation, quality ingredients, and attractive packaging.

Culinar Incorporated - 1990 to 1997

After five decades, Weston sold the Company in 1990 to Culinar Incorporated. A mere 7 years later, the Company was sold by Culinar to Beta Brands Incorporated. [The author is still conducting research into this history]

Beta Brands Incorporated - 1997 to 2003

Beta Brands Incorporated was formed in Canada on October 20, 1993, as the result of the amalgamation of two companies. As part of this formation, the Company acquired Alpha Candies Limited, a chocolate business. 

Beta Brands Incorporated (the “Company”) was formed, pursuant to the laws of the Province of Ontario, on October 20, 1993 as a result of the amalgamation of Santana Technology Corporation and 1041695 Ontario Inc. The common shares of the Company commenced trading on the Alberta Stock Exchange, (now the Canadian Venture Exchange) on October 27, 1993. The Company was continued pursuant to the laws of the Yukon Territory on September 20, 1999. The Company’s Registered Office is located at Suite 200, 304 Jarvis Street, Whitehorse, Yukon Y1A 2H2 and the head office and principal place of business of the Company is located at 1156 Dundas Street East, London, Ontario N5W 5Y4.

Source: Beta Brands Incorporated Annual Information Form For The Year-Ended December 31, 2001.

As part of the transaction that formed the Company in 1993, the Company acquired the chocolate business of Alpha Candies Limited.

Source: Beta Brands Incorporated, Annual Information Form For The Year-Ended December 31, 2001. 

The Canadian marketing and manufacturing rights for the Life Savers® candies, Breath Savers® mints, and Beech-Nut® cough drops were acquired by the Company from Hershey Canada Incorporated on January 15, 1996.

On December 11, 1995, the Company entered into an asset purchase agreement to acquire the Life Savers, Breath Savers and Beechnut cough drops businesses from Hershey Canada Inc., an unrelated third party.  The transaction closed on January 15, 1996.  The Company acquired the manufacturing operations, inventory and trademark rights associated with these businesses.  The total fair market value purchase price, exclusive of transaction costs and subject to a purchase price adjustment based on inventory levels at the closing date, was $25,090,973. The purchase price was allocated among capital assets as to $9,363,676, trademarks and licenses as to $13,935,323 and inventories as to $1,791,974.

Source: Auditor's Report, Consolidated Financial Statements of Beta Brands Incorporated, December 31, 1997.

In December 1995, the Company entered into definitive agreements with Johnvince Foods of Ontario, Canada, to sell the assets of Hershey Canada’s Planters nut business, and with Beta Brands Inc., to sell the Life Savers and Breath Savers hard candy business. These divestitures were completed in January 1996.

Source: The Hershey Company Fact Book - Prepared by: The Hershey Company Investor Relations Department. 

The McCormicks confectionary and cracker business was acquired in late December of 1997 by Beta Brands Incorporated.

On December 23, 1997, the Company completed the acquisition of the McCormicks cracker and confectionery businesses from unrelated third parties, Culinar Inc. and Culinar Manufacturing Inc.  The assets acquired include the land, building, inventories, equipment and trademarks, amongst others.  The total fair market value purchase price, exclusive of transaction costs and subject to a purchase price adjustment based on inventory levels at the closing date, was $17,489,785.  The purchase price was allocated among capital assets as to $10,923,586, inventories as to $4,539,785 and goodwill as to $2,026,414.

Source: Auditor's Report, Consolidated Financial Statements of Beta Brands Incorporated, December 31, 1997.

TORONTO, Dec. 24 /CNW/ - Beta Brands Incorporated (ASE:BBI) announced today that it has completed its previously announced acquisition of McCormicks as well as a refinancing which included a $13 million private placement and a $55 million credit facility.

Pursuant to the refinancing, C.M. Equity Partners, L.P. ("CMEP'') subscribed for 11,538,462 common shares of the Company at a price of $1.15 per share, for gross proceeds to the Company of $13,269,231 (the 'Private Placement'). In addition, CMLS Management L.L.C. ("CMLS''), the general partner of CMEP, assisted the Company in arranging a new $55 million credit facility. The proceeds resulting from the new credit facility and the Private Placement were used to complete the McCormicks acquisition and to retire all of the Company's subordinate debt obligations and bank loans, including working capital loans. Included in the financing is an available $10 million working capital facility.

Source: Beta Brands Incorporated Press Release, December 24, 1997.

When Beta Brands acquired the assets of the McCormicks business from Culinar in December 1997, we anticipated that the existing LifeSavers operation in Hamilton Ontario would, over the course of the current year be discontinued and relocated into the acquired facilities in London Ontario. With the rate of growth that we have experienced and with the need for space in London that will be created by emerging market opportunities, this plan became obsolete. The Hamilton plant will not be relocated in the foreseeable future. Consequentially, we have negotiated a five-year collective agreement for the LifeSavers operation and have established a positive labour relations environment. As a result, of this decision, the Company has saved a significant amount of cash that would otherwise have been required to fund the relocation.

Source: Beta Brands Incorporated CEO's Report to the Shareholders, Joseph Pulla, Chief Executive Officer, November 27, 1998.

The following table lists the locations of the Company’s manufacturing facilities: (approximate size)

London, Ontario 430,000 sq. ft. Owned [1156 Dundas Street East]

Hamilton, Ontario 50,000 sq. ft. Owned [100 Cumberland Avenue]

North York, Ontario 14,500 sq. ft. Leased [101 Alexdon Road]

Source: Beta Brands Incorporated Annual Information Form For The Year-Ended December 31, 2001.

A wholly owned subsidiary of Beta Brands Incorporated, Beta Brands USA Limited was created in December 1998 and was based in Des Plaines (Chicago) Illinois, located at 3158 South River Road, Suite 127. Beta Brands USA Limited had no assets.

Beta Brands Limited is engaged in the production of confectionery and baked goods from a facility in London, Ontario, the production of hardrolled candy from a facility in Hamilton, Ontario and the production of chocolate-panned products from a facility in Toronto, Ontario.

Beta Brands U.S.A., Ltd. is engaged solely in the sales and marketing of the Company’s products from a sales office in Des Plaines, Illinois.

Source: Beta Brands Incorporated Annual Information Form For The Year-Ended December 31, 2001.

In January 1999, the Company acquired the assets of Regal Confections Incorporated and Sweet Expressions Foods Incorporated. 

Subsequent to the end of the fiscal year, the Company completed the acquisition of the assets of Regal Confections Inc. (“Regal”) and Sweet Expressions Foods Inc. (“Sweet”). The assets acquired include inventories, accounts receivable, equipment and intellectual property, among others. The total fair market value purchase price, exclusive of transaction costs, was $17,566,675 plus the assumption of certain liabilities.

Source: Auditor's Report, Beta Brands Incorporated Notes to the Consolidated Financial Statements Years ended December 31, 1998 and 1997

As we announced on November 23, 1998, Beta Brands has entered into a letter of intent to merge the assets and certain liabilities of Regal Confections Inc. and Sweet Expressions Foods Inc. into its operations. This transaction, which we expect to close in December, will be one more step in building Beta Brands into a major participant in the Canadian confectionery industry. The addition of the principals from Regal and Sweet Expressions to the Beta management team will significantly strengthen our sales, marketing and distribution efforts in Canada. Building on its past success, we intend to operate the acquired Companies as separate divisions of Beta Brands. We are excited about the synergies that exist among the Companies and look forward to capitalizing on them almost immediately to drive profitable growth and increase shareholder value.

Source: Beta Brands Incorporated CEO's Report to the Shareholders, Joseph Pulla, Chief Executive Officer, November 27, 1998.

In May 2000, the Regal and Sweet Expressions division was sold to a management investor group.

In April 2000, the Company entered into a definitive agreement to sell its Canadian confectionery distribution business, including its Regal Confections and Sweet Expressions divisions (collectively, the “Distribution Business”) to a management investor group for approximately $25 million in cash.

Proceeds from the transaction were used to reduce indebtedness, including the full repayment of the Company’s outstanding Tranche C Senior Notes of approximately $18.1 million and to pay down a portion of its revolving credit notes.

Source: Beta Brands Incorporated 2000 Annual Report

A manufacturer of bakery and confectionery products for the Canadian and U.S. markets, Beta Brands Limited, a wholly owned subsidiary of Beta Brands Incorporated, was headquartered at the McCormick's plant at 1156 Dundas Street East in London, and used the factory as its main production plant, principle place of business, and head office. 

At December 31, 2001, the Company employed approximately 650 employees of whom approximately 530 are covered by collective agreements.

Source: Beta Brands Incorporated, Annual Information Form For The Year-Ended December 31, 2001.

The McCormick's factory produced high quality confection products, both branded and private labels. The McCormicks® brand was what led the Company product line, a brand in existence for 140 years. Owning a variety of trademarks, including the venerable McCormicks® brand, Breath Savers®, Beech-Nut®, Goody®, Champagne®, and Bite-Life®. Beta Brands produced product from four separate divisions in the London plant: the confectionery division, the chocolate division, the bakery division and the Breath Savers® division.

Competition

Direct competition in the U.S. for the confectionery market to Beta Brands was from Farley's and Sathers, Blueberry Hill Foods, Ferrara Pan Candy, and Sunrise Confections. In the U.S. chocolate market, Brach's, Zachary Confections, New England Confectionary, and Georgia Nut, were the direct competitors to Beta Brands.

Beta Brands competes with other confectionery and baked goods manufacturers. Management believes that Beta Brands is the fifth largest confectionery company in Canada after Cadbury, Hershey, Nestle and Effem (Mars®) and the third largest cracker manufacturer in Canada after Kraft/Nabisco and Dare. In the United States, Beta Brands competes with confectionery manufacturers including Kraft/Nabisco, Hershey, Effem, Ferrero Pan, Nestle, and others.

Source: Beta Brands Incorporated, Annual Information Form For The Year-Ended December 31, 2001. 

The Confectionery Division

Confection products manufactured under various brands and trademarks.

McCormicks

Beta Brands

Sweet Town

Fruit Slices

Gums

Spice Drops

Orange Slices

Valentine Hearts

Scotch Mints

5¢ Candy

Cinnamon Hearts

Assorted Jelly Eggs

Assorted Jelly Beans

Panned Eggs

Speckled Jelly Eggs

Sour Fancy Jelly Beans

Assorted Fancy Jelly Beans

Fancy Cinnamon Jelly Beans

French Burnt Peanuts

Boston Baked Beans

Circus Peanuts

Pastel Circus Peanuts

Marshmallow Bananas

Assorted Marshmallow Bananas

Marshmallow Strawberries

Marshmallow Strawberry Hearts

Fuzzy Bunnies

Marshmallow Peaches

Tropical Jellies

Mini Fruit Salad

Lemonade Slices

Jelly Hearts

Jube Hearts

Jelly Pumpkins

Sour Jube Pumpkins

Halloween Jubes

Cottontails (Fudge & Chocolate)

Jelly Bunnies/Chicks

Easter Jubes

Easter Sour Jubes

Christmas Bells

Christmas Wreaths

Jube Elves

Jube Santa

Assorted Jumbo Gums

Sour Jube Lips

Jungle Jubes

Jube Coins

Hot Cinnamon Bears

Assorted Jube Whales

Cherry Twists

Regular Jubes

The Chocolate Division

Chocolate products manufactured under various brands and trademarks.

McCormicks

Chocolate Almonds

Milk Chocolate Grand Slam

Chocolate Peanuts

Chocolate Raisins

Chocolate Cashews

Bridge Mix

Chocolate Coffee Beans

Chocolate Malt Balls

Chocolate Macadamia Nuts

Milk Chocolate Bars

Peanut Butter Cups

Fruit & Nut Bars

The Bakery Division

Cracker, biscuit, crisps, and cookie products manufactured under various brands and trademarks.

Compliments

Co-op

Dare

Champagne

Equality

Western Family

Harmonic

Demoules

Country Harvest

Millwheat

Taste Delight

Truly

Masterchoice

Safeway

Trader Jones

GV

WFN

BiteLife

Entertainers Crackers

Cracked Wheat

Toasted Wheat

Wheat Germ

Whole Wheat

Whole Wheat Reduced Salt

Whole Wheat Reduced Salt & Fat

Wheat Germ Reduced Salt

Vegetable

Wheat Germ & Sesame Seed

Multi Grain

Poppy Seed

Original

Entertainers Water Crackers

Regular

Cracked Pepper

Tomato & Onion

Roasted Garlic & Herb

Red Bell Pepper & Garlic

Snack Crackers

Regular

Ground Wheat

Vegetable

Cheese

Reduced Salt & Fat

Three Onion

Onion & Garlic

Poppy Seed

Shape Crackers

Winter/Christmas Shapes

Vegetable Shapes

Cheese Beasts (Animal Shapes)

Potato Crisps

Regular

Salt & Vinegar

BBQ

All Dressed

Sour Cream & Onion

Ranch

Cheddar Cheese & Herb

Garden Tomato

Oval Stoned Wheat

Onion Classic

Grilled

Cracked Pepper

Stoned Wheat Cracker

Regular

Reduced Sodium

Mini Stoned Wheat Crackers

Original

Toasted Sesame Seed

Garlic & Sundried Tomato

Cheese Medley

Graham

Graham Wafers

Graham Crumbs

Vegetable Crumbs

Cookies

Choco Chips

Oatmeal

Oatmeal Raisins

Apple Cinnamon

Coconut Macaroon

Shortbread

Ginger Snap

Lemon

Sugar Free Cookies

Chocolate Flavoured Chip

Vanilla

Coconut

Oatmeal Apple Cinnamon

Ginger Snap

Lemon

Fructose Cookies

Chocolate Flavoured Chip

Vanilla

Coconut

Chocolate Fudge

Oatmeal Raisin

Lemon

The Breath Savers® Division

Breath Savers®

Financial difficulties had been an ongoing problem for Beta Brands for some time, but the Company showed signs of recovering from its years of not being a profitable company.

Until recently, the financial picture for Beta Brands Inc. of London, Ont., was anything but sweet. Having taken over the McCormicks brand candy, cookie and cracker division from Montreal-based Culinar Inc. in 1997, Beta Brands management walked into a business that pretty much had the biscuit. John Lambert, now the CEO, admits that when he arrived in January 1999 as Beta Brands' president of manufacturing, his first job was to "sort out an unholy mess." In addition to basic neglect, there was no staff charged with strategic thinking, says Lambert. "The business was just broken." Beta Brands' stock price reflected the crumbling state of affairs: from an all-time high of $4.25 in March 1996, the company's shares (CDNX: BBI) were trading at just 2¢ each last December.

Today, the situation at Beta Brands, Canada's largest independent confectionery business, is a whole lot easier to digest. Sales for the fiscal year ended Dec. 31, 2001 were up 17% from 2000, to $77.3 million, while earnings before interest taxes depreciation and amortization (EBITDA) jumped 21%, to $8.1 million. As well, the company's bottom line improved, coming in with a net loss of $798,000 (2¢ a share) versus a loss of $8.5 million (21¢) the previous year. And though the company's stock is now trading at only about 30¢ to 35¢, that's still a 52-week high.

Lambert says Beta Brands' goal is to become a low-cost manufacturer of both branded and private label cookies, candies and biscuits. In addition to its Millwheat, Champagne and Country Harvest brand crackers, Beta Brands makes baked goods for grocers such as A&P, Sobeys and Wal-Mart. Big-name brand manufacturers are usually loath to make private label products for retailers, but Lambert is not. There may be tighter margins on private label, he says, but there are no big marketing expenses.

Meanwhile, he's optimistic about the growing market for candies. Last year, non-chocolate sweets (hard and soft) showed the highest rate of growth in the entire confectionery category, a $2-billion industry in Canada, with retail sales jumping 9% to $86.7 million. Breath fresheners? Another strong area, growing 8% to $79.2 million in 2001, while cough drop sales were flat, at $91.6 million. Lambert says candy is the fastest-growing category of food sold in grocery stores. AC Nielsen data puts it at 14% annually.

Source: 'A Sweet Deal' by, Zena Olijnyk, Canadian Business, May, 27, 2002, Vol. 75, Issue 10.

Dear Shareholders:

It is my pleasure to report to you on the progress made in fiscal 2001 toward our corporate goal of building Beta Brands into a profitable and recognized leader in the confectionery and baked goods industries. Since we initiated our strategic plan in calendar 2000, we have focused intently on growing our revenues, improving efficiencies and preparing for future growth. Thanks to the talents and planning of our management team, and the strong commitment shown by our employees, we believe Beta Brands delivered conclusive results in 2001. Although it is only a beginning, we are entering 2002 with a stronger balance sheet, a strong validation of our path to profitability plan, and a platform from which to build a recognized leadership position in the industry.

The key to our success continues to be a reputation for quality products recognized throughout the industry, and supported by widely known and respected brands like McCormicks®, Champagne®, Breath Savers® and Beech-Nut®. Our strategic plan leveraged this reputation for quality in order to penetrate new market opportunities, which includes private label manufacturing for U.S. mass merchandisers and retailers.

In 1999, our U.S. sales totalled $18.1 million. Today we have grown our U.S. sales in excess of $36 million, constituting approximately 48% of our consolidated revenue. This U.S. growth has been driven by an aggressive direct sales strategy and brokerage network, [led] by an industry leading sales team at Beta Brands U.S.A.

Armed with quality products and a reputation for on-time delivery, our U.S. team secured a major program with Wal*Mart in late 2000. We shipped our first order of an every-day confectionery program in the first quarter of 2001 under the "Great Value" private label line and are currently distributing our quality confectionery products to more than 950 of Wal*Mart’s 3,000 stores. We have also secured several additional contracts for private label confectionery and bakery products with North American retailers. Beta Brands continues to pursue opportunities to expand our relationship with Wal*Mart and other leading mass merchandisers, retailers and wholesale distributors while promoting the sale of both branded and private label confectionery and baked good products. Collectively, our customers in the United States helped us boost U.S. sales figures by nearly 72 percent in 2001 over the prior year. We anticipate the U.S. market will continue to be instrumental in driving future revenue growth at Beta Brands.

Fiscal 2001 also produced further financial evidence that our strategy is beginning to pay off, as we achieved record Earnings Before Interest, Taxes, Depreciation, Amortization, Foreign Exchange and Related Party Costs ("Operating EBITDA") levels. In 2001, Beta Brands reported Operating EBITDA of $8.1 million, representing a 21% increase over fiscal 2000 Operating EBITDA of $6.7 million. Net sales also experienced significant growth in 2001, growing 17% to $77.3 million from $66.2 million reported in the prior year.

While committed to aggressive top-line growth and greater operating efficiencies, management clearly understood that the Company’s debt structure needed to be reorganized in order to fund our growth strategy on an ongoing basis. As a result, we elected to sell the rights to the Life Savers® brand in Canada in December of 2001 and used the proceeds to pay down over $19 million in total debt. We believe that this sale was in the best interests of both parties. Beta Brands converted an asset at an attractive valuation for its shareholders, while Kraft obtained a product line that will complement its existing confection and snacking business. Canadian sales from the Life Savers® business were approximately $6.8 million in fiscal 2001. Beta Brands will continue to produce Life Savers® products for Kraft at agreed upon prices under a two-year co-pack agreement. Beta Brands continues to own the rights to the Breath Savers® and Beech-Nut® brands for the Canadian market as well as the facility and equipment used to produce these brands.

In a further effort to position the Company for future growth, Beta Brands also completed a private placement for preferred shares and updated its credit facilities subsequent to year-end. The updated credit facilities will reduce the Company’s cost of borrowing and will defer all but U.S. $0.88 million of fiscal 2002 principal repayments to our senior lenders. The preferred share private placement generated gross proceeds of approximately $1.37 million and will be used to fund the Company’s capital requirements.

Going forward, we intend to continue to implement our strategic plan. We will make every effort to grow our presence in the United States, Canada and abroad by pursuing new opportunities with Wal*Mart, other mass merchandisers, retailers and distributors and continue to leverage the reputation for quality products the Company began building long ago. We will better utilize our improved working capital to affect product line upgrades, thereby promoting greater internal efficiencies while providing us the means to meet anticipated increases in demand for our products. Finally, to enhance our strong organic growth prospects and to further improve our profitability, management will begin to identify potential acquisition candidates and strategic partners that expand our product lines and provide us with increased capacity.

I have spoken a lot in this letter about our improved financial situation. I would now like to close by acknowledging the people who made these improvements happen -- the employees of Beta Brands. Everyone at Beta Brands is part of one team, and management remains committed to providing the safest, healthiest, and most personally rewarding work environment possible to all of our staff.

On behalf of the Board, I would like to thank our shareholders, employees, customers and key suppliers for their continued support, and I look forward to reporting on our continued progress over the next twelve months.

Sincerely,

John C. Lambert

President and CEO

Source: Beta Brands Incorporated 2001 Annual Report.

In December 2001, Beta Brands completed the sale of its rights to the Life Savers® brand for the Canadian market to Kraft Canada Inc. and Kraft Foods Holdings, Inc. (collectively referred to as “Kraft”), for cash proceeds of $19.5 million. The sale of the Life Savers® brand resulted in a gain of approximately $11.3 million. Coincident with the sale of the Life Savers® trademarks and licenses, the Company entered into a two year agreement to co-pack Life Savers® products on behalf of Kraft for the Canadian market. The rights to the trademarks and licenses for the Breath Savers® and Beech-Nut® product lines for the Canadian market were not included with this disposition and the Company continues to own the right to manufacture and market these products.

Source: Auditor's Report, Beta Brands Incorporated, Annual Information Form For The Year-Ended December 31, 2001. 

As at December 31, 2001, $19,250,000 of the proceeds arising from the sale of the rights to the trademarks and licenses of the Life Savers brand was held in escrow. Since the Company had an agreement with its senior lenders as of December 31, 2001 to use the funds held in escrow to prepay debt owing to these lenders, the amount held in escrow had been presented as a reduction of their debt...

Source: Beta Brands Incorporated 2002 Annual Report, Auditor's Report, Notes To The Consolidated Financial Statements December 31, 2002 and 2001.

Months later, the 2002 Second Quarter financial report took some of the shine off the previous 2001 Annual Report.

PRESIDENT’S MESSAGE:

We are disappointed that our sales revenue for the second quarter has fallen short of our expectations and last year’s revenue for the corresponding quarter. However, we remain focused on delivering our business objectives of growing top line revenue through new product introductions and U.S. sales growth, as well as improving and updating our manufacturing processes.

For the three months ended June 30, 2002, the Company had revenue of $16.1 million versus $17.6 million for the corresponding period in the prior year. Revenue, net of products associated with the Life Savers® brand, was $15.0 million in the current quarter and $15.6 million in the quarter ended June 30, 2001.

Sales to Canadian customers decreased to $8.2 million during the second quarter of 2002 from $10.2 million in the second quarter of 2001. This reduction is primarily the result of lower volumes and margins associated with the Life Savers® brand, and reduced shipments to one of our largest Canadian distributors, to accommodate its inventory reduction plan. Beta Brands sold the Canadian rights to the Life Savers® brand to Kraft Foods in December of 2001 and continues to manufacture Life Savers® products for Kraft under a two-year co-pack agreement. Beta Brands’ sales to U.S. and international customers rose to $7.9 million compared to $7.4 million a year earlier.

Earnings before interest, taxes, depreciation, amortization, foreign exchange and related party costs ("Operating EBITDA") were a loss of $0.24 million for the three- months ended June 30, 2002 compared to Operating EBITDA of $1.2 million for the corresponding period in the prior year. Net income for the quarter totalled $0.21 million or $0.01 per share compared to net income of $0.88 million or $0.02 per share for the three-month period ended June 30, 2001. Current quarter net income was positively impacted by a $2.5 million foreign exchange translation gain as well as reduced interest and finance fees.

Revenue for the six-month period ended June 30, 2002 was $31.6 million versus $33.0 million in the first six months of 2001. Operating EBITDA for the six- month period was a loss of $0.40 million versus earnings of $1.8 million during the first six months in the previous year. The net loss during the first six months of 2002 decreased to $2.0 million from a net loss of $4.7 million in the corresponding period in 2001, primarily due to a foreign exchange translation gain and reduced interest expense.

As I mentioned in my last report to shareholders, due to the seasonal nature of our business, sales revenue has historically increased during the second-half of the calendar year. Management believes that this trend will continue again this year. During the quarter, we continued to focus on expanding our line of bakery products with the launch of two new flavours of Champagne® brand crackers for the U.S. market. In addition, our ongoing focus to increase capacity utilization in our bakery operation has resulted in significant orders for private label crackers from new customers including a major U.S. distributor and a U.S. grocery retailer. Sales of bakery products increased by approximately 16% during the first six months of the year compared to the corresponding period last year.

In the Company’s confectionery line of business, we launched a new high-volume tub program for a number of marshmallow and jube products to a major club store retailer. During the second quarter, we also successfully launched a line of Spider-Man® confectionery and bakery products in Canada and the U.S. under a licensing agreement. In addition, we began introducing a new Breath Savers® line of peg top packaged products to the trade, which we expect to begin shipping in the third quarter of 2002. These products will leverage Breath Savers® strong brand identity and will initially target grocery, drugstore and mass merchandiser distribution channels.

Productivity improvement initiatives continued during the quarter at our London facility where work on a new mogul line and four new packaging lines is progressing. Installation of the packaging lines and the mogul line are expected to be completed in our third quarter ended September 30, 2002. These installations represent a very significant investment in manufacturing processes by the Company and are expected to increase throughput and increase margins. Gross margins declined during the quarter from $3.4 million or 19.2% of sales to $2.0 million or 12.5% of sales during the current quarter.

Gross margins for the first half of 2002 were $4.1 million or 12.9% of sales compared to $6.0 million or 18.4% of sales for the corresponding period in 2001. These reductions were primarily due to the lower shipments and reduced margins related to Life Savers®, unfavourable product mix, and increased raw material and maintenance costs. Management is taking aggressive and concerted action to address the controllable issues.

As at June 30, 2002, the Company had cash of $0.67 million contributing to positive working capital of approximately $1.2 million. This compares to a working capital deficiency of approximately $5.1 million at June 30, 2001. Subsequent to the end of the second quarter, Beta Brands obtained a short-term bridge loan facility up to a maximum of U.S. $3.5 million to help fund its working capital requirements during the peak sales period in the second half of the year. This loan is similar to the short-term facility obtained by the Company in previous years.

I would like to once again thank all of our shareholders, customers and employees for their continued support and I look forward to reporting on our progress in the near future.

Sincerely,

John Lambert

President and CEO

Source: Beta Brands Incorporated Interim Report, Second Quarter, Ended June 30, 2002.

Beta Brands Incorporated Third Quarter report began to reveal the serious problems the Company was experiencing. 

MESSAGE TO SHAREHOLDERS:

Improving our manufacturing processes and increasing our capacity and throughput is a key part of our business plan as we strive to meet the demand for our products. Our improvement initiatives continued at our London facility where a new mogul and new packaging lines for production of jube and jelly confectionery products became operational in the quarter ended September 29, 2002. These installations represent a very significant investment in our manufacturing processes. As installation work continued during the third quarter, production delays, primarily attributable to the installation and start-up of the new lines, caused confectionery shipments to be below our expectations. We continue to work diligently to overcome these delays in order to increase confectionery shipments and meet customer delivery requirements. While we have experienced implementation challenges over the last two quarters, we continue to expect these initiatives to deliver long-term value for all of our stakeholders.

We also remain committed to delivering on our business objective of growing top line revenue through new product introductions and U.S. sales growth. We are pleased to report that during the quarter, we began manufacturing a new private label brand of cracker products at our London facility for a major U.S. marketer and distributor of natural and specialty foods. Given the extensive distribution network of this new customer and the popularity of this category, we believe that this new private label brand of crackers could become one of our highest volume bakery products. The initial order, which was filled during our third quarter, was for nine different cracker products.

For the three months ended September 29, 2002, the Company had revenue of $18.4 million compared to $19.5 million for the corresponding quarter last year. Revenue, net of products associated with the Life Savers® brand, was $17.2 million in the three months ended September 29, 2002 and $17.9 million in the corresponding quarter of 2001. Beta Brands sold the Canadian rights to the Life Savers® brand to Kraft Foods in December of 2001 and the Company continues to manufacture Life Savers® products for Kraft under a two-year co-pack agreement. Our third quarter sales to Canadian customers were unchanged on a year-over-year basis at $9.5 million. Sales to our U.S. and international customers for the quarter ended September 29, 2002 decreased to $8.9 million from $9.9 million in the same period a year ago, primarily due to the production delays referred to above.

Earnings before interest, taxes, depreciation, amortization, foreign exchange and related party costs ("Operating EBITDA") was $0.6 million for the three-months ended September 29, 2002, compared to Operating EBITDA of $1.8 million for the corresponding quarter last year. Our net loss for the quarter totalled $3.4 million or $0.08 per share compared to a restated net loss of $3.5 million or $0.09 per share for the three-month period ended September 30, 2001. Revenue for the nine-month period ended September 29, 2002 was $50.0 million versus $52.5 million in the corresponding period a year ago. Operating EBITDA was $0.2 million compared to $3.5 million during the first nine months of 2001. The Company’s net loss for the first nine months of 2002 was $5.4 million or $0.13 per share compared to a restated net loss of $8.2 million or $0.20 in the corresponding period in 2001. The decreased loss in the first nine months of 2002 resulted from reduced interest expense and a foreign exchange gain of $0.6 million, compared to a restated foreign exchange loss of $3.3 million for the same period a year ago.

Gross profit during the quarter was $2.6 million or 14.1% of sales compared to $4.3 million or 22.2% of sales in the third quarter a year ago. Gross profit for the nine-month period ended September 29, 2002 was $6.7 million or 13.3% of sales compared to $10.4 million or 19.8% of sales for the corresponding period in 2001. The reduction in the third quarter was primarily due to lower margins related to Life Savers®, reduced confectionery production and shipments due to production delays as described above, and increased raw material costs for certain commodities. We are taking aggressive and concerted actions, including focused process improvements and recruitment of additional technical resources to address these production issues and to improve confectionery shipments and margins moving forward.

As at September 29, 2002, the Company had $0.04 million in cash and a working capital deficit of $2.4 million. This compares to a working capital deficit of approximately $7.0 million at September 30, 2001. During the quarter, we obtained a short-term bridge loan facility up to a maximum of US $3.5 million to help fund our working capital requirements during the peak sales period in the second half of the year. This loan is similar to the short-term facility obtained by the Company in previous years. As of September 29, 2002, the Company had utilized US $1.5 million of this short-term bridge loan facility. We are likely to require additional short-term financing within the next twelve months to supplement our working capital requirements and to fund our capital expenditure program.

During the third quarter ended September 29, 2002, we announced the formation of a special committee of the Board of Directors to address short and long-term financing requirements. Subsequent to the end of the third quarter of 2002, the special committee negotiated an agreement with the Company’s senior lenders under which the Company deferred its October 15, 2002 interest and principal payment due in conjunction with our senior debt facility until January 15th, 2003. In addition to this deferment of approximately $1.3 million in interest and principal, our senior lenders have also agreed to waive a capital expenditure covenant of the loan agreement for the period ended September 2002.

I would like to once again thank all of our shareholders, customers, employees and suppliers for their continued support. We look forward to reporting on the progress of our special committee of the Board, while we continue to strive to increase our production output and efficiency, launch new products and further build relationships with existing and new customers in both Canada and the United States.

[Unsigned]

Source: Beta Brands Incorporated Interim Report, Third Quarter, Ended September 29, 2002

Credit Facilities

Non-current long-term debt as of September 29, 2002 was $48.3 million compared to $55.3 million at September 30, 2001 and $50.8 million at December 31, 2001. The Company’s Tranche "A" and Tranche "B" long-term debt matures in 2004 and 2005 respectively. The repayment schedule is set out in the notes to the attached financial statements.

As previously disclosed, the Company is dependent on the continued renewal support of its lenders of long-term debt.

LONG-TERM DEBT

January 1, 2003 to January 1, 2006

Tranche A Total USD $22,906,000

Tranche B Total USD $8,636,000

Total $31,543,000 [sic] 

Tranche A Total CAD $36,130,000

Tranche B Total CAD $13,622,000

Acquisition Note Payables Total $1,500,000

Total $51,252,000

Source: Beta Brands Incorporated Interim Report, Third Quarter, Ended September 29, 2002.

Senior management changes to Beta Brands Incorporated were announced on November 6, 2002.

The Board of Directors of Beta Brands Incorporated (“Beta Brands” or the “Company”) (TSX Venture Exchange: BBI), today announced the resignation of John Lambert as President and Chief Executive Officer and as a Director of the Company. Concurrent with this development, the Board announced the appointment of a new President and a new Chief Operating Officer. Gary Musick, President of Beta Brands U.S.A. Ltd., has been appointed President of Beta Brands Incorporated, and Stephen Hummel, P.Eng., has been appointed Chief Operating Officer of the Company. Mr. Musick and Mr. Hummel will both report directly to the Board of Directors.

“On behalf of the Board of Directors, I would like to thank John for his many contributions to Beta Brands,” said Joel Jacks, Chairman of Beta Brands. “We wish him all the best in his future endeavors.”

The Company’s new President, Mr. Gary Musick, has been with Beta Brands since 1998. Since joining the Company as President of its subsidiary, Beta Brands U.S.A. Ltd., Mr. Musick has been instrumental in significantly increasing the Company’s U.S. sales. Mr. Musick’s primary mandate as President will be the sales and marketing of Beta Brands’ confectionery and bakery products in both Canada and the U.S. Prior to joining Beta Brands, Mr. Musick was a principal at Houston Foods in Chicago, Illinois.

Mr. Stephen Hummel, the Company’s new Chief Operating Officer, recently joined Beta Brands on a contract basis to manage the Company’s Hamilton, North York and London bakery operations. As Chief Operating Officer, Mr. Hummel’s primary mandate will be to strengthen the Company’s operational performance and to improve its manufacturing effectiveness and capacity utilization. Before joining Beta Brands, Mr. Hummel was Vice President, Manufacturing for COMPX Inc., a component manufacturer, where he was successful in modernizing the company’s international factory operations and significantly improving financial results. Prior to COMPX Inc., Mr. Hummel was CEO of Knoll North America Inc., a former subsidiary of Westinghouse. Mr. Hummel also worked for Procter & Gamble for ten years in various manufacturing management positions.

Source: Beta Brands Incorporated Press Release, November 6, 2002. 

Beta Brands Incorporated Interim Report, Third Quarter, Ended September 29, 2002, states that John C. Lambert resigned on November 5, 2002.

On May 2, 2003, Beta Brands Incorporated reported the Company was insolvent.

FORECLOSURE

On May 2, 2003, the Company announced that its senior lenders foreclosed on the assets of the Company due to payment defaults under its senior secured indebtedness. The senior secured lenders obtained an order of the Ontario Superior Court of Justice implementing the foreclosure. Under the terms of the foreclosure order granted by the Ontario Superior Court of Justice, Beta Brands Incorporated has been left with no assets and has ceased to carry on business. The board of directors is considering the appropriate next steps for Beta Brands Incorporated to take, which may include a voluntary liquidation and dissolution.

The Company consented to abridge the notice period for the foreclosure. The board of directors of the Company gave extensive consideration to various restructuring alternatives, but concluded that consenting to abridge the notice period for the foreclosure, as requested by the senior secured lenders, was the best available alternative to preserve the confectionery and bakery operations as on-going businesses, to preserve value for the secured creditors of the Company and to be in the best interests of the trade creditors and employees of the Company’s subsidiaries. In reaching its decision to consent to an abridgement of the notice period for the foreclosure, the board of directors also considered a report prepared by a national accounting firm which indicated that, had a liquidation of the Company’s operating subsidiaries occurred, there would have been a very substantial shortfall to the Company’s senior secured lenders and no value to any other stakeholders.

As reported in September 2002, the Company formed a special committee of the Board of Directors to address the Company’s short and long-term financing requirements. For some time the Company has had to seek extensions from its senior secured lenders for the principal and interest repayments on the Company’s senior secured debt as the Company had not been generating sufficient cash flow to enable it to repay these obligations on their originally scheduled maturity dates. The last extension expired on April 30, 2003. Following this expiry the senior lenders gave notice to the Company demanding repayment of the senior debt and enclosed a notice of intention to enforce their security. The senior secured lenders obtained an order of the Ontario Superior Court of Justice implementing the foreclosure.

Under the foreclosure order, the senior secured lenders have accepted common shares and subordinated indebtedness of the Company’s operating subsidiaries in satisfaction of the senior secured indebtedness of the Company. The Company’s operating subsidiaries, Beta Brands Limited and Beta Brands U.S.A., Ltd., have continued as going concerns and continue to operate as they have in the past, but under new ownership. Beta Brands Limited, a private company is now owned directly by the senior lenders. Beta Brands U.S.A., Ltd. is now a wholly owned subsidiary of Beta Brands Limited. Trade creditors, customers and employees of the former operating subsidiaries, Beta Brands Limited and Beta Brands U.S.A., Ltd. have not been affected by the foreclosure.

Source: Beta Brands Incorporated Interim Report, First Quarter, Ended March 30, 2003.

1. DISCONTINUANCE OF OPERATIONS

On May 2, 2003, the Company announced that its senior lenders had foreclosed on the assets of the Company due to payment defaults under its senior secured indebtedness. The senior secured lenders obtained an order of the Ontario Superior Court of Justice implementing the foreclosure. Under the terms of the foreclosure order granted by the Court of Justice, Beta Brands Incorporated was left with no assets, no liabilities, a deficit of $25.4 million, equivalent to its share capital, and ceased to carry on business.

The following highlight certain financial conditions that prevailed at March 30, 2003, with comparative numbers as at December 31, 2002:

Cumulative deficit

2002 $50,058,000

2003 $48,693,000

Capital deficiency

2002 $25,256,000

2003 $23,891,000

Working capital deficiency

2002 $53,687,000

2003 $51,423,000

Debt repayments required over the next 4 years

2002 $51,417,000

2003 $48,316,000

The following highlight certain financial conditions that prevailed at December 31, 2002:

Losses for several years

Increasing cumulative deficit

Increasing capital deficiency

Working capital (deficiency)

Debt repayments required over the next 4 years (2001 – 5 years)

The Company’s continuance as a going concern had been dependent on the following:

Immediate generation of profitable operations

Immediate generation of positive cash flows from operations

Continued support of its bridge financing lender

Continued support of its trade creditors

Continued support of its lenders of long-term debt

Successful restructuring of its long-term debt payment commitments to a program of repayments tailored to the financial capabilities of the Company

Source: Beta Brands Incorporated Interim Report, First Quarter, Ended March 30, 2003, Notes To The Consolidated Financial Statements, December 31, 2002 and 2001.

Beta Brands Limited - 2003 to 2007

On May 3, 2003, it was announced Beta Brands Limited and Beta Brands USA Limited had become private companies after the foreclosure of their parent company Beta Brands Incorporated.

Beta Brands Limited (the “Company”), a leading manufacturer of fine confectionery and bakery products, has announced that the senior lenders of its former parent company have become the sole shareholders of Beta Brands Limited and that Beta Brands U.S.A., Ltd. has become a wholly owned subsidiary of Beta Brands Limited. Beta Brands Limited and Beta Brands U.S.A., Ltd are both private companies. Beta Brands Limited also announced that it has established a revolving line of credit with a new lender to provide day-to-day operational funds. The availability of new funds will allow Beta Brands Limited to introduce new products, execute other strategic initiatives and better service its customers.

The public company Beta Brands Incorporated, which was previously the sole shareholder, is no longer the owner of Beta Brands Limited or Beta Brands U.S.A., Ltd. The restructuring of the former parent company will have no effect on the day-to-day operations of the operating companies, Beta Brands Limited and Beta Brands U.S.A., Ltd. The new capital structure and ownership of Beta Brands Limited and Beta Brands U.S.A., Ltd. results in a much stronger company than existed prior to these changes. No changes are contemplated in the operations and management of Beta Brands Limited or Beta Brands U.S.A., Ltd. as a result of these changes.

Beta Brands Limited has manufacturing facilities in London, Hamilton and North York Ontario and has sales offices in London and Hamilton, Ontario, Canada. Beta Brands U.S.A., Ltd., is located in Chicago, Illinois U.S.A.

The Company’s mandate is to become a low-cost branded and private label manufacturer of confectionery and bakery goods. Beta Brands Limited will expand its market share through aggressive and innovative marketing and packaging and will continue to target the Canadian and United States marketplaces.

Source: Beta Brands Limited Press Release, May 3, 2003.

Beta Brands Limited announced on March 31, 2004 that an affiliate of the private investment firm Sun Capital Partners Incorporated had concluded a buyout of Beta Brands Limited. 

Beta Brands Limited ("Beta Brands" or the "Company"), a leading manufacturer of confectionery and bakery products today announced the acquisition of Beta Brands by an affiliate of Sun Capital Partners, Inc., a private investment firm based in Boca Raton, Florida.

Gary Musick, President of Beta Brands Limited, said "we are very pleased to announce the purchase of Beta Brands by Sun Capital. We welcome Sun Capital as our new equity partner and look forward to the financing, industry contacts, and the wealth of operating experience that Sun Capital makes available to Beta Brands. The new capital structure of Beta Brands results in a much stronger company than existed previously and will enable the Company to capitalize on business opportunities."

Bud Terry, Managing Director of Sun Capital said, "Beta Brands' high quality products and enviable customer base are key assets to the company. We look forward to working with management and being an active partner in the success of the Company."

Sun Capital Partners, Inc. is a leading private investment firm focused on buyouts of market-leading companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in approximately 50 companies during the past several years with combined sales in excess of $7 billion.

Source: Beta Brands Limited Press Release, March 31, 2004.

The Breath Savers® division was relocated from the Hamilton plant to the London plant, and this was announced on May 25, 2004. All operations at the Hamilton plant were discontinued. The Hamilton facility was closed.

Beta Brands Limited ("Beta Brands" or the "Company"), a leading manufacturer of confectionery and bakery products today announced it will relocate production from its Hamilton plant to its London, Ontario facility, and that it will discontinue operations at its Hamilton facility. All production equipment associated with the Breath Savers® product line and all related support functions will be relocated to Beta Brands' London, Ontario facility.

This relocation will enable Beta Brands to focus additional resources on growing the Breath Savers® product line and will result in the creation of additional jobs at the London facility.

Gary Musick, President of Beta Brands Limited said, "Although relocation of Breath Savers® production to London will create additional jobs at that facility, this was a very difficult decision to make. Regrettably, it results in the discontinuation of operations in Hamilton and closure of the facility. In an effort to make the Hamilton plant a viable ongoing operation, Beta Brands attempted for more than two years to obtain additional hard-rolled candy business. Unfortunately, due to changing consumer trends and reduced demand for hard-rolled candy, this was not possible." Mr. Musick went on to say "We would like to take this opportunity to thank the Hamilton employees for their efforts and service with Beta Brands. We wish each of them every success in the future."

Source: Beta Brands Limited Press Release, May 25, 2004.

In 2004, Beta Brands was in dire financial trouble. Negative cash flow, and increasing debt was becoming a crushing financial weight on the Company. On December 19, 2004, Beta Brands entered into financing arrangements through a Loan and Security Agreement with Textron Financial Canada Limited. This made Textron the primary lender and secured creditor of Beta Brands.

Textron Canada and Beta Brands entered into certain financing arrangements pursuant to which Textron Canada agreed to provide Beta Brands with a revolving loan facility and two term loans (the "Loan Facilities"). As security for the obligations owing to Textron Canada by Beta Brands under the Loan Facilities, Beta Brands provided Textron Canada with security interests in all its present and after acquired assets, property and undertaking, including the Real Property.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

A Participation Agreement amongst Beta Brands, Textron, and Sun Beta, the sole shareholder of Beta Brands Limited, was made on August 29, 2005, and amended on June 20, 2006.

Pursuant to a Participation Agreement made as of August 29, 2005, which was amended by a First Amendment dated as of June 20, 2006 (together, the "Participation Agreement"), Sun Beta LLC ("Sun Beta") purchased from Textron Canada an interest in certain of the advances made by Textron Canada to Beta Brands (the "Participation") Pursuant to the Participation Agreement, Textron Canada holds all of the obligations of Beta Brands to Textron, to the extent of the Participation, arising out of the relevant loan and security agreements - including the security granted to Textron Canada by Beta Brands - as trustee for Sun Beta.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

Beta Brands found it difficult to operate within the Loan Facilities of Textron almost from the very beginning. Although amendments to the agreement were intended to assist Beta Brands in overcoming its financial difficulties, Beta Brands continued to default on its loan obligations contained in the Loan and Security Agreement.

In consultation with Sun Beta in August of 2005, Beta Brands determined that it needed to restructure its operations. Consideration was given to such options as:

...selling its business to a third party in whole or parts, completing a strategic acquisition, moving to leased premises using existing or new equipment, or an orderly liquidation of the assets of the company.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

Capitalink was engaged by Beta Brands to investigate several of these options. The most significant of these was the marketing of the business and or each of its divisions to potential buyers throughout North America and Europe. Capitalink contacted 131 potential buyers between approximately September 2005 and December 2006. Nine companies that expressed interest in the bakery division were:

Ralcorp Holdings Inc. ("Ralcorp")

Original Foods

Hershey

Johnvince Foods

Regal Confections

Commercial Bakeries

Topps Co.

Ancor Holdings

Pine Ridge Foods

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

It was determined in December 2005 by Beta Brands that it was no longer financially feasible to operate from the London factory.

By August 2006, the Confectionery Division's continued financial losses was greatly contributing to the rapid deterioration of the financial state of the Company. None of the divisions were earning a profit, but the Confectionery Division was losing the most money of the divisions. Despite a year long marketing effort to sell the confectionery division, no offers materialized. Beta Brands financial situation continued to deteriorate, and the Company decided to exit the US confectionery market in September 2006.

Through its efforts, Capitalink was able to secure the sale of the Breath Savers® business for a price of approximately $1.2 million in May 2006 to Cangro Vegetables Incorporated and Cangro Foods Incorporated.

Capitalink was also successful in generating a proposal from Ralcorp Holdings Incorporated for the purchase of certain bakery division assets for US$3 million. Beta Brands did not pursue this offer because it was decided to attempt to restructure the company, continue operations, and preserve the business rather than "breaking up" the Company. 

Only the Ralcorp offer was received for the bakery division. No offers of purchase were received for the confectionery division, or the chocolate division.

Beta Brands explored these options:

a) potential strategic acquisitions with North America Bakeries and J.T. Bakeries, two Canadian bakery operations;

b) restructuring options with other food operations owned or controlled by Sun Capital, the sole shareholder of Sun Beta;

c) acquisition opportunities with a Texas-based candy manufacture and a Colorado-based bakery operation;

d) outsourcing option with a Brazilian manufacture for the confectionery business; and

e) requesting Capitalink to contact and pursue possible acquisitions targets across North America.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

The Company did not bring any of these options to fruition.

In a desperate financial situation, Beta Brands returned in May 2006 to the offer made by Ralcorp in March 2006. The offer remained, but was modified, and Ralcorp would complete the transaction through its subsidiary, Bremner.

In November 2006, Beta Brands secured the services of Mintz and Partners to include review of Beta Brands' situation with respect to the Company's secured creditors. Mintz concluded the Company’s assets would be of a significant lower value if the Bremner sale did not take place, and that the sale would be advantageous to the Company's secured creditors. Textron and Sun Beta were provided with copies of this consultation.  

Company management advises that the bakery division is a separate distinct division from the other Beta Brands divisions. Its inventory and equipment can be readily sold and removed from the premises without disrupting the opportunity to sell Beta Brands' other divisions, or individual assets thereof.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

In late November of 2006, Textron served notice to Beta Brands Limited, in accordance with section 244 of the Bankruptcy and Insolvency Act, that Textron intended to enforce its security.

244. (1) A secured creditor who intends to enforce a security on all or substantially all of

(a) the inventory,

(b) the accounts receivable, or

(c) the other property

of an insolvent person that was acquired for, or is used in relation to, a business carried on by the insolvent person shall send to that insolvent person, in the prescribed form and manner, a notice of that intention.

Source: Bankruptcy and Insolvency Act. 

On December 13, 2006, an Asset Purchase Agreement was made between Bremner and Beta Brands. Beta Brands entered into a Forbearance Agreement with Textron that same day. Textron agreed to provide Beta Brands with financing for inventory production to complete the sale to Bremner, and to postpone enforcing Textron’s security with certain conditions and terms. Textron would not provide Beta Brands with anymore long term financing. It was expected Beta Brands' dire financial situation would force the Company to cease operations in December 2006, or January 2007.

On December 29, 2006, in accordance with The Bakers, Confectionery, Tobacco and Grain Millers International Union Local 242G collective agreement (May 8, 2006 to May 7, 2009), a scheduled annual two weeks plant shutdown and temporary lay off began. That same day, all business and plant operations of the Company permanently ceased. Soon after, Beta Brands was put into Court Appointed Receivership. 292 employees were suddenly out of work (27 salaried on January 3, 2007, and 262 hourly employees on January 5, 2007) without severance pay, pay in lieu of notice of severance pay, termination pay, vacation pay, and pension or benefit amounts. As per Court Order, only the wages for actual work completed was paid to the employees. 

Court Appointed Receivership - 2007 to 2009

THIS COURT ORDERS that all employees of the Debtor shall remain the employees of the Debtor until such time as the Receiver, on the Debtor's behalf, may terminate the employment of such employees. The Receiver shall not be liable for any employee related liabilities, including wages, severance pay, termination pay, vacation pay, and pension or benefit amounts, other than such amounts as the Receiver may specifically agree in writing to pay, or such amounts as may be determined in a Proceeding before a court or tribunal of competent justice.

THIS COURT ORDERS that (subject to obtaining leave from this Court) nothing in this Order shall affect the rights of the Debtor's employees to seek relief from any court of competent jurisdiction, The Receiver be and is herby authorized and directed to pay to each of the Debtor's employees such wages as [may] be due for work actually performed by such employees up to and including the date of the Order. This prior sentence shall not be construed as creating any entitlement to vacation pay, severance pay or termination pay owing to such employees. 

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

Mintz was appointed by Order of the Honourable Madam Justice Lax of the Ontario Superior Court of Justice on January 3, 2007, to be the Interim Receiver over the undertakings and assets of Beta Brands as regards Beta Brands' 12 secured creditors and 583 other creditors. 

Possession and Security

10. On January 3, 2007, upon the issuance of the Appointment Order at 6:00 pm, the Receiver attended the Company's premises at 1156 Dundas Street East, London, Ontario (the "Premises") at approximately 6:30 pm at which time a copy of the Appointment Order was served on Mr. Robert Neable, Vice President, Finance of the Company.

11. The Receiver had pre-arranged for a third-party security firm to be on site at the premises upon the Receiver's arrival. The security firm has provided 24-hour surveillance since the Receiver's appointment.

12. On January 3, 2007, the Receiver arranged for the locks to be changed on all external doors for which three keys were made. Two keys were kept by the Receiver and one key was provided to the security firm.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

At January 2007, the 12 secured creditors were owed in excess of $13,119,000. At December 31, 2006, estimated Beta Brands assets were valued at $14,894,000. This included the land and factory.

Estimated Book Value as at December 31, 2006 [partial list]

e) Land and building $4,361,000

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

Amounts (approximate) owed by the insolvent corporation to which each party which holds security on the property described above (balances at December 31, 2006 according to Beta Brands books and records):

Textron Financial Canada Corporation $6,269,000

Sun Capital $3,718,000

Transamerica Life Insurance Company $783,000

Peoples Benefit Life Insurance Company $783,000

Massachusetts Mutual Life Insurance Company $846,000

MassMutual Corporate Value Partners Limited $285,000

MassMutual Corporate investors $291,000

MassMutual Participation Investors $144,000

Carl Marks & Co., Inc. Unknown

GE Capital Unknown

Pitney Bowes Unknown

Xerox Unknown

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

The Receiver was informed by former management of Beta Brands that the estimated vacation pay owing to members of Local 242G as of the date of the appointment of the Receiver is approximately $500,000.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

Reasons given by Beta Brands' management for the Company's insolvency are as follows:

a) the Company's key candy consumer decreased their purchasing from the Company from approximately $20 million in 2004 to $17 million in 2005 to $10.5 million in year-to-date 2006;

b) the Company's decision to exit the US candy business by the end of December of 2006, which had the effect of significantly lowering the Company's borrowing capacity under its revolving loan facility;

c) the strong Canadian dollar over the past two to three years has significantly impacted profits on sales to US customers;

d) following an oven fire in July of 2006 and an accident involving an employee in August 2006, the Ontario Ministry of Labour and the London fire department issued work orders for approximately $440,000 in upgrades, of which approximately $285,000 has to date been spent; and

e) the Company incurs significant production interruptions and considerable costs to repair and maintain its aging manufacturing equipment.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

a) Foreign exchange risk

Foreign exchange risk is the risk to the Company’s earnings that arises from fluctuations in foreign exchange rates, and the degree of volatility of these rates. The Company is exposed to the risk that the recoverable value of accounts receivable stated in other currencies, primarily United States dollars, will fluctuate due to changes in exchange rates. In addition, the Company’s debt is denominated in US dollars. The Company periodically uses forward foreign exchange contracts to fix the exchange rates on identifiable foreign currency exposures. At December 31, 1998, the Company had no outstanding foreign exchange forward contracts relating to these exposures. In addition to the amortization of the deferred foreign exchange loss relating to debt on the statement of earnings and deficit, approximately 1998 - $199,000 of foreign exchange losses; 1997 - gain of $1,000, resulting from operations are included in general and administrative expenses.

Source: Beta Brands Incorporated Annual Report 1998, Auditor's Report, Notes to the Consolidated Financial Statements Years ended December 31, 1998 and 1997.

The Canadian dollar was valued at an all-time low of $0.6179 USD on January 1, 2002, and had climbed to an all-time high value of $1.1030 USD on November 7, 2007. (Source: Data obtained from Bank of Canada)

Mintz received Court Order and direction to complete the Bremner sale that included the sale of some of the bakery division equipment, trademarks, customer lists, finished product, and other related material. This modified Bremner Transaction resulted in the sale of $3,715,116.08 in Beta Brands' assets.

In accordance with the Court authorized Marketing Process Approval Order, obtained on February 20, 2007, Beta Brands' remaining assets were placed in an ad in the Globe and Mail national edition newspaper by Mintz on February 22, 2007, intending to solicit offers. In addition to this, Mintz circulated an advertisement in the four separate National Confectioner's Association NCA Smartbrief emails on February 22, 26, 27, and March 1, 2007. The National Confectioner's Association's promotional materials advised their Smartbrief emails had 10,000 subscribers of which 3181 subscribers were confectionery or chocolate manufactures. Email correspondence were also sent out by Mintz to potential purchasers who had expressed an interest in the assets or business of Beta Brand before the commencement of marketing process.

A detailed Information Package that included the listing of the entire assets of the Company for sale was created by Mintz, and was discussed with representatives of the Union, and the Mayor of the City of London.

London City Mayor, Anne Marie DeCicco-Best, added her approval to documents sent to Senior Vice President of Mintz & Partners, Daniel R. Weisz, from the London Economic Development Corporation regarding Beta Brands with a signed letter dated January 24, 2007.

On behalf of the City of London, I am pleased to support the accompanying documents prepared by the London Economic Development Corporation, which we believe will help raise a level of interest in Beta Brands, as a going concern.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

The marketing process of Beta brands assets generated a response from 97 potential purchasers. Each of the 97 were provided with a link to a secure website and a unique username and password that allowed access to the Information Package. All but 15 of the 97 parties linked to the website. Tours of the premises were provided for the 18 parties that requested this. Mintz emailed all parties on March 16, 2007 confirming Tuesday, March 20, 2007, at 14:00 hrs was the deadline for the receipt of offers. Because of an overlooked date error in the newspaper ad that read, Wednesday, March 20, 2007, one interested party was permitted to submit an offer on Wednesday, March 21, 2007.

Seven of the 18 offers received were for all of the manufacturing machinery at the premises. All of these offers came from auctioneers/equipment resellers. No confectionery manufactures made any en bloc offers. No interest expressed by any party was for the operation of the Company as a turnkey business. None of the en bloc offers received were made from the Information Package. Specific machinery offers were made by 11 of the interested parties. Company trademark only offers were made by 2 interested parties.

All of the trademarks held by Beta Brands, excluding those purchased by Brenmer, were sold to Regal Confections on April 20, 2007, for approximately $200,000.

Manufacturing equipment from the confectionery and chocolate divisions, office furniture and fixtures, inventory, excluding certain other assets and all trademarks, was sold to Crescent Commercial Corporation for $1,294,935 on April 20, 2007.

Five former Beta Brands employees were sold at fair market value laptop computers and other miscellaneous computer equipment they had used as part of their former employment at a price of $1,886.32.

No offers were received for the building and land.

Textron has received full payment from the sale of Beta Brands' assets. Sun Beta is still owed in excess of $3 million, in connection to its participation in Textron's loan to Beta Brands. All other secured and unsecured creditors, except for one, have not received repayment. 

The Bakers, Confectionery, Tobacco and Grain Millers International Union Local 242G took their final failed legal action on July, 19, 2007 to claim the amount of vacation pay owed to the former Beta Brands employees.

[48] The following words of the Court of Appeal at para. 69 of Ivaco with respect to pension claimants are equally applicable to the claims of Local 242G’s members in relation to their vacation pay:

Because the federal legislative regime under the CCAA and the BIA determines the claims of creditors of an insolvent company, if the rights of pension claimants are to be given priority, Parliament, not the courts, must do so.

Indeed as noted in Ivaco at para. 69, “Parliament has at least signalled its intentions to do so” by passage of the Wage Earner Protection Program Act, S.C. 2005, c.47, which, as the court noted, had not then been proclaimed in force. As of this date, this legislation still has not been proclaimed. This legislation, which defines “wages” to include vacation pay, would establish a program to enable individuals to collect “wages” from employers who are bankrupt or subject to a receivership. Regrettably for the members of Local 242G, without such legislation that would give their claim priority, the declaration they seek cannot be granted.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

Mintz listed the property with CB Richard Ellis Limited (CBRE) by Court Order and direction on April 12, 2007. Before Mintz was appointed interim Receiver, an agreement between Beta Brands and CBRE was entered into for the sale of the Beta Brands premises. As a result of this agreement, a contact list of potential buyers was created by CBRE. Mintz concluded it was best to list the premises again with CBRE to reduce costs. This listing with CBRE lasted until March 31, 2008. The listing agreement with CBRE expired on September 30, 2008, and it was not renewed by Mintz. Although 15 offers for the premises were received and accepted by Mintz none of these offers were finalized. 

Decade Group Inc. and Mintz entered into a Real Property Asset Purchase Agreement on April 23, 2008 for the sale of the premises to Decade for $1.8 million. Decade was provided until July 21, 2008, to conduct due diligence with respect to the premises. Decade later requested an extension until September 30, 2008, that Mintz granted. Before this deadline was reached, Decade requested an extension of a further six months. Mintz responded with a request that as condition of this latest extension Decade pay for the associated operating costs of the premises during the six months. This was refused by Decade, and Decade then terminated the agreement.

A letter from The Corporation of the City of London was received by Mintz on February 11, 2008, advising Mintz that City Council had started the process of designating the premises, the factory in particular, as a heritage site. As of 2014, City of London documentation shows City Council has taken no action in this regard. Most of the 1913 structure has allegedly since been designated a heritage site by the Province of Ontario.

The London Fire Department inspected the premises and identified various fire hazards and potential points of illegal entry. Mintz arranged the removal and disposal of flammable materials, and took the appropriate steps needed to secure the building. The London fire Department was satisfied with the measures taken by Mintz.

The Ministry of Environment inspected the premises, and brought attention to an approved polychlorinated biphenyl (PCB) storage area in the factory. Mintz had the PCBs safely removed and properly disposed of.

A blue historical plaque was mounted on one of the main entrance columns for years during the plant's operation, but the plaque went missing in the months after the factory closed. Another missing blue plaque mounted on the opposite side read, "Executive Entrance", or similar.

A Credit Union for McCormick's employees that existed at the factory was discontinued at some time before the receivership of Beta Brands. 

London Police Service were permitted by Mintz to use the building for their canine unit training at no charge. An offer was made by Mintz to London Police to use the premises for the police tactical training unit, but Mintz could not confirm the building would be available on the calendar days needed by the police tactical unit, and the offer was declined.

The expenditure of maintaining the unoccupied factory even at the lowest required level possible is enormous costing hundreds of thousands of dollars per year, and this placed excessive financial demand on Mintz.

Receiver's Final Statement of Receipts and Disbursements [partial list] for the period January 3, 2007 to June 10, 2009

12. Security and possession $332,826.86

18. Utilities (including deposits) $944,812.61

19. Property taxes $410,256.12

20. Repairs and maintenance $440,300.02

21. Insurance $300,854.08

Cash on hand: $27,643.21

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

Unable to find a buyer, and not having the funds to continue to maintain the premises, the possession of the former McCormick's factory and property by Mintz is Court authorized abandoned. Legal possession was returned to defunct owner Beta Brands Limited.

THIS COURT ORDERS that the Receiver be and is hereby discharged as Receiver of the undertaking, property and assets of the Debtor and shall not be responsible for any costs or expenses in connection with the assets and property of the Debtor that are incurred or that accrue from and after June 26, 2009, provided however that notwithstanding its discharge:

(a) the Receiver shall remain Receiver for the performance of such incidental duties as may be required to complete the administration of the receivership herein, and

(b) the Receiver shall continue to have the benefit of the provisions of all Orders made in this proceeding, including all charges, approvals, protections and stays of proceedings in favour of the Receiver.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

NO PROCEEDINGS AGAINST THE RECEIVER

THIS COURT ORDERS that no proceeding or enforcement process in any court or tribunal (each, a "Proceeding"), shall be commenced or continued against the Receiver except with the written consent of the Receiver or with leave of this Court

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

NO PROCEEDINGS AGAINST THE DEBTOR OR THE PROPERTY

THIS COURT ORDERS that no Proceedings against or in respect of the Debtor or the Property shall be commenced or continued except with the written consent of the Receiver or with the leave of this Court and any and all Proceedings currently under way against or in respect of the Debtor or the Property are hereby stayed and suspended pending further Order of this Court.

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820.

Court Authorized Interim Receiver Abandonment Of Beta Brands Limited Premises - 2009 to 2014

There have been three reports released by the City of London dated, June, 2010, January, 2011, and April, 2012, regarding City of London directed studies of city controlled and planned development of the former McCormick's premises and 87 acres of area private property. Property owners in the study area were apparently not consulted in the completion of these reports.

In 2012, the premises were reported by The London Free Press to be $744,250 in arrears of municipal property taxes. At January 11, 2007, the list of creditors which do not hold security on the property included:

City Of London Treasurer $74,928.54

Source: The Ontario Superior Court of Justice, Court File Number: 06-CL-6820. 

A suspicious fire broke out in 2012 on the first floor in a room adjacent to the boiler room at the rear north end of the building causing an estimated $100,000 worth of damage. A support column and a number of web steel joints were damage by the fire. The roof on the west side of the building at the support column partially collapsed from the fire. The fire was extinguished by the London Fire Department before the flames could reach the 1913 part of the factory. A firewall helped in containing the blaze.

Notices posted on the factory's boarded up entrance doors by the City of London dated October 1, 2012 were addressed to: Beta Brands ℅ Mintz & Partners Limited stating the property was, as a result of the fire, in violation of Property Standards By-law CP-16 (consolidated June 28, 2010) when inspected on September 17, 2012. 

You are hereby Ordered to carry out the repairs set out in the "Schedule of Repairs to be Made" attached hereto and forming part of this ORDER.

You are hereby Ordered to carry out repairs as set out in the "Schedule of Repairs to be Made" or the site is to be cleared of all buildings, structures, debris or refuse. This ORDER shall be complied with and the property brought into conformance with the standards prescribed in the Property Standards By-law forthwith.

Where it has been determined that the repairs or clearance as set out in this Order have not been carried out in accordance with this ORDER as confirmed or modified, in addition to any possible court action, The Corporation of the City of London may carry out the repairs or clearance at the owner's expense. The Corporation of the City of London shall have a lien on the land for the amount spent on the repairs or clearance and the amount shall have priority lien status described in section 1 of the Municipal Act 2007. The amount may be added to the tax roll of the property.

These notices were posted regardless of The Ontario Superior Court of Justice June 26, 2009 Order regarding the discharge of the Receiver Mintz & Partners, and The Ontario Superior Court of Justice Orders regarding no proceedings against the Receiver, the Debtor, or the Property. 

City Of London Expropriation Of Beta Brands Limited Premises - 2014 to Present

In July 2014, it was reported by the London Free Press the City Of London had sold the land and factory to Sierra Construction in a dubious deal for only $1. The City of London expropriated the premises from Beta Brands Limited at an earlier date, and the agreement of sale to Sierra has not been finalized as of 2015. Signs posted on the premises stated City of London Property.

In the August 13, 2015, edition of The Londoner newspaper, it was announced that on September 2, 2015:

The Old East Village Community Association and the City of London will be cohosting a community information meeting to discuss the City’s proposal for the redevelopment of the former McCormick’s Factory Site, which includes a mixture of: residential, commercial, office and/or institutional uses. The meeting will include presentations on the proposed plans, development processes and timing as well as provide an opportunity for the community to provide comments. The meeting is intended to facilitate a dialogue about the development and discussion about opportunities and constraints for the proposed development.

The McCormick family is buried in Mount Pleasant Cemetery in London, Ontario. The McCormick monument is located in Section C of the cemetery.

© Trevor Dailey

This article is revised from time to time. 

 

Here is yet another case of someone trying to beat a train at a road crossing. And who gets the blame for the train colliding with the vehicle and almost killing the 20 year old kid driving the car? The railway, of course.

Rail safety expert blasts London crossing where car and freight train collided

Operation Lifesaver has for many years been educating the public regarding trains. Almost every collision between trains, vehicles, and pedestrians is 100 per cent preventable. Still, there are people out there who will never learn the easy way, or at all. If a crossing has flashing warning lights, warning bells, and a gate, some people will disregard all of these warnings.

Approximately 50% of vehicle/train collisions occur at crossings with active warning devices (gates, lights, bells).

According to studies, vehicle drivers who do not exercise due caution at crossings are the main reason for highway/ railway crossing collisions.

The locomotive engineer is required, by law, to sound the train whistle when approaching most crossings.

Source: Operation Lifesaver

Some municipalities including London have even removed an important safety device.

Since 1963, local municipal by-laws have prohibited the use of train horns within city limits. Consequently, trains only sound the bell when approaching the crossing. [London, Ontario]

In addition to alerting pedestrians and motorists to the presence of a train, the train horn appears to encourage drivers to respect crossing protection. In a comparison of accidents occurring at crossings with and without whistle bans, it was found that accidents where motorists drove around lowered gates were 128% more common at crossings where a whistle ban was in place.

The report identified that pedestrians were subject to an increased risk of injury in areas where anti-whistling by-laws had been implemented.

Source: Railway Investigation Report R12T0217

Where train anti-whistling by-laws are in place, a train may only sound its whistle to prevent an accident. Hearing a train whistle blasting is not uncommon as it usually means someone disregarding the warning devices at a crossing.

Video footage of the crossing with train and car drivers

Personally, I am fed up with the blaming the railway for the stupid actions of others. The kid did not stop for the train. The problem is not that there is not a gate at the level crossing, the problem is he tried to beat the train in the first place. He did it on his own, and he almost paid for it with his life.

Canadian Pacific Railway upgrading London crossing where train and car collided in May

Some people will still gamble with their lives, and the lives of others, instead of waiting for a train to pass. No lights, bells, or gate is going to change that. Tragically, for these people, only a deadly collision with a 110 plus tonne locomotive will. 

"No cure for fools." - Yojimbo (1961) 

© Trevor Dailey

There is an old routine that goes like this:

"See any trains? No, but they have been here. There are tracks."

I search for maps that have the old removed railway tracks marked on them. Many street maps do, I have found. It seems railway tracks do not get updated as frequently as streets do. I will spend time looking at a satellite view online, searching for clues to where a now vanished railway track once was.

If railway tracks once passed through a wooded area, the path can be discerned with careful observation of tree height. The trees growing over the old track path will be shorter than the others. There are other clues that will show where railway tracks once ran, like the condition of the ground in places. Old factories commonly had railway spur lines to them, and the remains can sometimes still be seen. Study satellite maps long enough, and the old railway paths almost reveal themselves. Canadian National Railway (CN) has made it even easier to find lost railway tracks.

This online CN Network Map allows one to see where the CN railway tracks are today, and where many once were. Looking at the map area in and around my city, I learned of long gone railway tracks, and many disappeared spur lines. Some tracks were removed many years ago, but the line on the map still traces the old railway track path. However, not all old railway tracks are marked. The CN online map is a valuable resource for me as I learn more about where some of the mighty trains once rumbled along.

© Trevor Dailey

1885 North America Railway Map

Transport Canada: Overview of Rail Transportation

I am fed up with politicians, special interest groups, and Internet monkeys attempting to 'renew' and 'revitalize' downtown, and other economically depressed areas in the City with their anti-capitalism ideas that continue to destroy the ecomomy of the city.

Taking heavily from a survey that appeared in the May 15, 1981 issue of the London Downtown Metro Bulletin, I created a survey for business owners.

In all the years I have heard from everyone else on the subject, I have never heard from the business owners themselves. I guess nobody bothered to ask them in the past three decades. 

1) Is your business a:

Proprietorship

Limited company

Partnership

Chain affiliate

Other (specify)

2) Is your business a:

Retail outlet

Service industry

Dining/tavern

Financial institution

Medical institution

Entertainment industry

Educational

Other (specify)

3) How many employees do you maintain?

Full-time

Part-time

Seasonal

Contract (temperary or ongoing)

4) How long has this particular business been in operation?

Months

Years

Downtown?

Yes

No

5) Do you have other locations?

Yes

No

In malls?

Yes

No

If yes, which malls? (Comment)

If not Citi Plaza (downtown) then, why not? (Comment)

6) Why did your business set-up downtown? (Comment)

at a mall? (Comment)

7) Do you consider your rent/mortgage (whichever is applicable) for your business space:

Low

Average

High

Have you experienced an increase in rent/mortgage in the last year?

Yes

No

If yes, then:

Less than 10%

10% to 20%

21% to 39%

40% to 60%

More than 60%

9) What are your largest costs of doing business? (select all that apply)

Payroll

Employee turnover

Taxes (specify if you wish to)

Government laws and regulations (specify if you wish to)

Shoplifting

Vandalism

Other crime (specify if you wish to)

Licencing (specify if you wish to)

Inflation

Overhead

Utilities (specify if you wish to)

Insurance

Maintenance

Inventory

Supplies

City by-laws (specify if you wish to)

City zoning laws (specify if you wish to)

Other (specify)

10) How will you deal with increases in the cost of doing business?

Reduction of staff

Yes

No

Increase prices

Yes

No

Reduce inventory

Yes

No

Move from present location

Yes

No

Other (specify)

11) In the last 2 years, has your business:

Contracted

Stayed the same

Expanded

12) In the next 2 years, do you expect your business to:

Contract

Stay the same

Expand

13) How do you feel about government subsidies to business? (Comment)

14) Have you ever participated in subsidy programs?

Yes

No

15) Can you recollect the specific programs?

Yes (specify)

No

16) Did the subsidies help substantially?

Yes

No

17) Do you approve of subsidies for your competitors?

Yes

No

18) Do you want a government-regulated tax-funded Business Improvement Association (BIA)?

Yes

No

If yes, should the Board of Management be elected by the surtaxed business people?

Yes

No

If no, do you believe there is a need for a collective body to organize business owners in your area?

Yes

No

If Yes, comment on how this could be done.

19) What factors positively impact your business? (Comment)

17) What factors negatively impact your business? (Comment)

18) What should, or should not, government do to help your business? (Comment)

© Trevor Dailey

This page is revised from time to time.

I find it interesting sometimes to compare the past and the present. I have my deceased grandfather's Canadian Soldier's Handbook from 1943. It contains a lot of interesting information, but I found the information on Unemployment Insurance and bonds the most interesting for a comparision of 1943 and 2015.

Employment Insurance in 2015. [Unemployment Insurance was changed to Employment Insurance]

Am I eligible for EI regular benefits?

You may be entitled to receive EI regular benefits if you:

are employed in insurable employment; lost your employment through no fault of your own; have been without work and without pay for at least seven consecutive days in the last 52 weeks; have worked for the required number of insurable hours in the last 52 weeks or since the start of your last EI claim, whichever is shorter; are ready, willing, and capable of working each day; and are actively looking for work (you must keep a written record of employers you contact, including when you contacted them).

You may not be entitled to receive EI regular benefits if you:

voluntarily left your employment without just cause; were dismissed for misconduct; or are unemployed because you are directly participating in a labour dispute (strike, lockout, or other type of dispute).

What is the two-week waiting period?

Before you start receiving EI benefits, there are two weeks for which you will not be paid. This is what we call the "waiting period." The waiting period is like the deductible that you must pay for other types of insurance.

You usually serve the waiting period at the very beginning of a benefit period, unless you receive earnings during this two-week period. In that case, the waiting period will start during the first week for which you would otherwise be entitled to benefits.

How much will I get?

We cannot tell you exactly how much you will receive without having processed your application. However, we can tell you that the basic rate for calculating EI benefits is 55% of your average insurable weekly earnings. As of January 1, 2015, the maximum insurable earnings amount is $49,500. This means that you can receive a maximum amount of $524 per week.

For how long will I receive EI benefits?

You may receive EI regular benefits for a period ranging from 14 to 45 weeks. The number of weeks you may receive benefits depends on the unemployment rate in your region and on the number of hours of insurable employment that you accumulated during your qualifying period, which is usually the last 52 weeks before the start date of your claim.

Source: Employment Insurance Regular Benefits

Unemployment Insurance in 1943.

Unemployment Insurance

Under the Unemployment Insurance Act of 1940, employers and the Government [Government no longer contributes] are required to contribute to the Unemployment Insurance fund. If an employee has made contributions for at least 30 weeks and becomes unemployed he can apply to his nearest Unemployment Insurance office, for a subsistence allowance provided he is fit and capable of working but for whom no work is available.

For example, if you have contributed 36¢ per week for 30 weeks, for a total of $10.80, you can obtain as much as $80.40 in six weeks of insurance benefits. If you are steadily employed in insurable employment for five years, you would contribute $93.60 and would be entitled to draw benefit for as much as $748.80 or about $8.00 for every $1.00 you have contributed.

Source: Canadian Soldier's Handbook, 1943.

Investing And Saving in 2015.

The Canada Premium Bond

The Canada Premium Bond (CPB) is the only product available for sale through financial institutions, dealers and Customer Service. It is a safe and secure savings product issued and fully guaranteed by the Government of Canada.

Since 1 August 2012, The Canada Premium Bond can be redeemed at any time during the year. Note that if CPBs are redeemed prior to the anniversary date of issue, interest earned from the last anniversary date up to the date of redemption will be forfeited, and only interest earned up to the last anniversary date of issue will be paid out.

Since November 2012, The Canada Premium Bond has a three-year term to maturity, with interest rates announced for the same period and remaining in effect for that announced period. At the end of the period, new rates are announced by the Minister of Finance based on the prevailing market conditions.

Starting October 2013, a social insurance number (SIN) will be mandatory when purchasing a CPB. For minors who do not have a SIN, the date of birth will be mandatory. As well, direct deposit information is mandatory for Regular Interest Bond purchases.

The Canada Savings Bond

Since November 2012, Canada Savings Bonds (CSBs) are only available through the Payroll Savings Program.

The Canada Savings Bond is a safe and secure savings product issued and fully guaranteed by the Government of Canada. CSBs can be redeemed at any time during the year.

The Canada Savings Bond has a three-year term to maturity, with interest rates announced for one year and remaining in effect for that period. At the end of one year, new rates are announced by the Minister of Finance based on the prevailing market conditions.

[As of November, 2017, Canada Savings Bonds and Canada Premium Bonds are no longer available for purchase.]

Source: Canada Savings Bond Program

Investing And Saving in 1943.

War Savings Certificates And Stamps

This is a very easy and profitable method of saving. You may easily purchase certificates by going to your Paymaster who will make arrangements for an assignment of a portion of your pay to cover the cost. The Government wants to borrow the money from you now to pay for the guns, tanks, shells, etc, which will beat the enemy.

Remember that for every $4.00 you invest in War Savings Certificates now, you get $5.00 at the end of the seven years - guaranteed by the Government of Canada. Save your money for a rainy day.

Source: Canadian Soldier's Handbook, 1943.

© Trevor Dailey

London, Ontario, Canada.

One hears many explainations why London is also called, "The Forest City". Many are incorrect. Here is the origin of the name, "The Forest City"

A line in a previous part of this paper suggests a closing paragraph. I said there that a traveller coming to London from the east suddenly found himself in a little clearing in the forest. That was for many years a characteristic of the place; and was the origin of the familiar name of "The Forest City." Some people to-day have the belief that the name was given it on account of the number of trees on its streets. But it was so-called long before any of those trees were planted. It was essentially a forest town. Standing at the intersection of two streets, whichever way the eye was turned the vista was closed by the dense forest. As the country around was gradually cleared of its super-abundant woods, far-seeing citizens introduced the custom of planting trees along the sides of our streets and avenues; and for once, at least, a municipal council was found ready to spend money, the results of which would not be apparent the same year. So, from the one cause or the other, London has always been justly entitled to the name of "Forest City."

Source: Pioneer Days In London, by A. T, Campbell (1921) Page 36.

The reason for the name London is uncertain despite what some write on the Internet about it. It appears Governor Simcoe chose the name "New London", but it is not certain why he did. Perhaps the answer is in an archived document. 

The name "London" was connected with this locality at an early period in history. At first it was only a name on paper applied by Governor Simcoe to the site which he proposed to build a town. Then it was more definately attached to a section which we now know as London Township. 

Source: Pioneer Days In London, by A. T, Campbell (1921) Page 22. 

© Trevor Dailey 

The Principle of Pot (2010) is a documentary about Marc Emery presented by Freedom Party of Ontario leader Paul McKeever. It is approximately 4 hours long in two main parts. The Principle Of Pot is not about cannabis. 

Before watching the documentary, on DVD, I did not know a whole lot about Marc Emery, and he wasn't a person I admired or liked. My opinion of him as a "drug dealer who got what he deserved" when he was sent to a U.S. prison has changed. As this documentary showed me, I did not have all the facts to create an informed opinion, and much of what I thought regarding the Marc Emery case, and the individual, was clearly wrong. Going into this documentary, I had my own opinions.

I do not do recreational drugs. I do not associate with the drug culture, a culture I do not like. I do not like being around drunkards or stoners. My personal policy when it comes to drugs is basically do whatever drugs you want as an adult, but don't do any of it around me, and don't think society should bail you out if drugs ruin your life.

The Principle of Pot is an objective documentary that does not advocate cannabis use. The documentary tells the story of Marc Emery from his beginnings in London, Ontario up until days before his imprisonment the U.S. following his extradition to the U.S. for drug charges brought forth by the U.S. Drug Enforcement Agency (DEA). The documentary shows Marc Emery as he fights against a municipal Union (CUPE) garbage strike by renting a truck and picking up the garbage with volunteers in certain areas from elderly and lower income households, the law prohibiting Sunday shopping, one video clip from 1990 shows Emery in a heated debate with (baffling) still Sarnia Mayor Mike Bradley who strongly supported the Sunday Shopping Ban, opposition to the proposed tax money funded Pan Am Games, as well as his fight for the legalization of marijuana. Everything in the documentary is very detailed, and it does a very good job of showing who Marc Emery really is as a person, and the political motivation behind sending him to a U.S. prison for committing a U.S. crime while in Canada.

An annoyance with the video I have is the occasional and intentional replying of a certain words from a Emery's speech that Paul McKeever seems to use make the point known to the viewer. This "skipping record" effect is unnecessary in my view.  

The Principle Of Pot full documentary, in a playlist, is available on YouTube, and is also available in a 3 DVD complete movie. I highly recommend watching The Principle Of Pot. 

© Trevor Dailey

YouTube: The Principle Of Pot - full movie in playlist.

Audio podcast: Just Right: 137 – Guest: Marc Emery, ‘Prince of Pot’ / Guest: Paul McKeever, Producer, The Principle of Pot

Audio podcast: Just Right: 149 – Selling your organs / Marc Emery and the Principle of Pot – Part 2

Elsie was the only child born to Daniel Simmons Perrin (1833-1908) and Alicia Day Perrin of London, Ontario, Canada. Elsie's father was the proprietor of D.S. Perrin And Company.

Perrin's Company started about 1861 with a bakery and soda water factory located on Hamilton Road.

In 1863, the company had moved to Horton Street where gingersnaps, soda crackers, and old fashioned stick candy was made by hand.

By 1881, Perrin had a factory located at the north side of Dundas Street between Ridout and Talbot streets and had been in operation since 1870. In the years following, the D.S. Perrin Company thrived and expanded to be both a national and international manufacture of biscuits and candy.

The Company was a major employer in the City Of London with approximately 500 workers in 1900, and had branch warehouses and offices in: Toronto, Montreal, Quebec (City), Ottawa, Kingston, Hamilton, Fort William (Thunder Bay), Winnipeg, Calgary, Edmonton, Vancouver, Sydney, (Nova Scotia), Halifax, and St. John.

Perrin's registered product included: Sterling Cream Sodas (biscuits/crackers), Sterling Chocolates, Black Prince Chocolates, White Rose Bon Bons, assorted Fancy Biscuits, and Excelsior Cough Drops.

Fire destroyed the Perrin factory in 1911, and a new factory was built on the same site. The giant D.S. Perrin Company factory and the executive offices were located at 82-92 Dundas Street (factory) and 71-91 and 82-88 Carling Street (offices). The factory stood six-stories high, and was a city landmark for years. The Perrin business was sold to competitor McCormicks in 1926. The Perrin factory and offices were closed in 1960s, the factory later demolished, and the area redeveloped into a provincial courthouse and a Bell Canada building.

Daniel Perrin purchased a farm in the outskirts of the City, at what is today 101 Windermere Road, in 1883 called "Windermere" from the sons of William and Phoebe Glass. William was an entrepreneur who achieved success in expanding his father's grain and flour business, served in the Canadian militia with the rank of Colonel, and was appointed Middlesex County Sherif which he retained until his death. Since 1871, the Glass family had used Windermere as their summer retreat until William's death in 1883.

"Windermere" was neatly engraved into the two stone gate pillars on either side of the entrance to the farm, but it was not known by either family when, by whom, or why. To this day, the motivation for the name "Windermere", that can still clearly be seen on both pillars today, for the property remains a mystery. The Glass and Perrin family continued on with the name, and the Perrins also used the large property as a summer retreat.

A working farm in 1871, the Glass and the Perrin families transformed the farm into a park like property over the next 50 years. Many trees were planted, the grounds landscaped, and the property transformed into the interests of the owners. Windermere over time included, boating, hiking, lawn tennis, horseback riding, and a nine-hole golf course.

As a young woman, Elsie showed a talent for architecture. At 15 years old, it is believed Elsie presented her father with the design for the Gatehouse of Windermere. Daniel Perrin is said to have been delighted with Elsie's design. The still standing gatehouse resembles a life size dollhouse in some respects with imagination and creativity in its design. Elsie would also express her artistic talent through painting.

Dr. Hadley Williams was a University Of Western Ontario professor of surgery and anatomy. Described as a brilliant teacher, Williams would become Victoria Hospital's head surgeon. The University of Western Ontario gave Dr. Williams an honorary doctorate in 1928 for Hadley's role in construction of the medical school. Hadley and Elsie were married in 1903, and as a wedding gift, the couple was given the deed to Windermere from Elsie's father. Windermere would become the year round-home of Elsie and Hadley.

Although somewhat opposite in personalities, Hadley being socially outgoing and enthusiastic and Elsie having a demeanour that was self-effacing, the two were inseparable, and Hadley was the love of Elsie's life. During the First World War (1914-1918), Elsie accompanied Hadley overseas to England. During their time away from Windermere, the Victorian style house that had been constructed by William Glass in the 1870s was demolished on the instruction of Elsie, and a new home built in its place.

The new Spanish Colonial home included Elsie's designs, such as: interior trim of gum wood, the roof of red tile, the stucco walls, the beamed ceilings, and a round-arched arcade the the porch recessed behind. These designs were influenced by Elsie and Hadley's visits to Florida and California. It is surmised plans for the new house were drawn by the architectural firm of John M. Moore that based its plans on the ideas Elsie had created. In 1929, a member of the firm, O. Roy Moore, designed the drawing room addition to the rear of the home.

In 1932, Hadley died, and Elsie died in 1934. Elsie left her Last Will And Testament with instructions for what she wanted to be done with her Estate after her death. All of her assets, not including the Windermere property, the house, and her personal effects contained within the house, were converted into cash. After the cost of her funeral, testamentary by her Will bequeathed, and all debt paid, the remaining money was to be held in a "residuary trust fund" overseen by her two appointed Trustees, Talbot MacBeth and Thomas Graves Meredith. This fund was approximately $1,000,000 in total (about $18,000,000 in 2017 money).

…I give, devise, limit and appoint to the said Talbot Macbeth and the said Thomas Graves Meredith, my Trustees, … upon trust to sell, call in and convert into money the same, or as such part thereof as shall not consist of money, (save and except the property owned by me in the said Township of London and known as "Windermere" (hereinafter called "Windermere") and being all real property owned by me in the said Township of London, and save and except all the furniture, books, pictures, plates, glass and china which, at the time of my death shall be in, about or belonging to the dwelling-house at "Windermere" (hereinafter called "my household furniture and effects") and with end out of the moneys produced by such sale, calling in and conversion, and with and out of my ready money, to pay my funeral and testamentary expenses and debts, and the legacies bequeathed by this Will...

The "the residuary trust fund" money was to be invested by the Trustees, and the annual money generated from these investments was to be used to properly care for Elsie's dogs and horses for as long each lived, and the animals not be be worked or ill treated. The London Humane Society was to receive an annual payment of $200 (approximately $4000 in 2017 money) for a period of 20 years from her death. Elsie's longtime housekeeper, Harriet Kestle (Corbett), was to be allowed to live in the house, and to have free use of the land at Windermere without charge for as long as she wished to live there. The Trustees were to pay Harriet an income of $55 (about $1000 in 2017 money) per month from the Trust Fund annual investments revenue, her living and medical needs, to pay taxes, insurance premiums, and the maintenance and upkeep of the house and property for as long as she lived at Windermere.

…and to invest the residue of the said moneys in any investments authorized by law for trust funds, with power for the Trustees of this my Will, from time to time, to vary such investments, and to stand possessed of the said residuary trust funds and the investments for the time being representing the same (hereinafter called "the residuary trust fund") upon trust to pay out of the annual income of the "residuary trust fund" for the proper care and maintenance of all the horses and dogs which I shall own at the time of my decease so long as they, or any of them, live, and to keep the said animals at "Windermere" and to see that they are not worked or ill-treated; to put out of the said income to the Humane Society of the said City of London to sum of two hundred dollars per annum for twenty years from the time of my decease; to permit the said Harriet Kestle to reside in my dwelling-house at "Windermere" and to have use of the same and the land upon which the said dwelling-house is erected, known as "Windermere" and "my household furniture and effects", free of charge, so long during the term of her natural life as the said Harriot Kestle wishes to reside therein; to pay to the said Harriet Kestle, for her support and maintenance in the said dwelling-house, so much of the annual income of "the residuary trust fund" as the Trustees of this my Will may from time to time deem necessary or expedient so long as the said Harriet Kestle resides in the said dwelling-house and the Trustees of this my Will shall, so long as the said Harriet Kestle resides in the said dwelling-house, pay out of the income of "the residuary trust fund" the taxes upon Windermere, the insurance premiums, and such amounts as may be necessary and expedient to keep the said dwelling-house and Windermere in a good and sufficient state of repair…

I direct the Trustees of this my Will to pay to my housekeeper, Harriet Kestle, (now known as Harriet Corbett), fifty-five dollars per month, as wages, so long during the term of her natural life as she wishes to reside, and does reside in the dwelling-house erected upon my property, known as "Windermere", mentioned in in my said Will, and keeps and maintains my dog, Shaker, and I declare that this amount is intended to be and shall be in addition to the provisions made for the said Harriet Kestle (or Corbett) by my said Will, and I give same to Harriet Kestle (or Corbett) accordingly.

Other persons in Elsie's employ were also granted provisions in the Will.

I direct the Trustees of my said Will to retain at Windermere aforesaid the services of William Kenny, Mary Gowdy, Winniam Gay, and Frederick Russell for at least ten years after my decease, and to pay to them respectively the wages which he or she was receiving from me immediately before my decease.
I direct the said Trustees to permit the said Mary Gowdy to live with the said Harriett Kestle (or Corbett) in the said dwelling-house, free of charge, so long as the said Harriott Kestle (or Corbett) resides there, and I direct my said Trustees to pay to the said Harriet Kestle (or Corbett) for the support and maintenance of the said Mary Gowdy in the said dwelling-house, so much of the annual income of the residuary trust fund as my said Trustees may, from time to time, deem necessary or expedient.

At the end of Harriet's life, the City Of London was to be permitted to use Windermere under certain conditions that the land be used as a public park and the house be used as a museum only.

…and upon the decease of the said Harriet Kestle, or when she ceases to reside in the said dwelling-house, whichever event first happens, to permit the Corporation of the City of London, and its successors to use and occupy "Windermere" and "my household furniture and effects" for all time to come as a Public Park and Museum only, and upon the express condition that they shall be used only as a Public Park and Museum...

In the event of the Corporation of the City of London, or its successors, ceasing at any time to use and occupy "Windermere" and "my household furniture and effects" solely as a Public Park and Museum, I give, devise, and bequeath "Windermere" and "my household furniture and effects" unto Ursuline Religious of Diocese of London Ontario, for Brescia Hall for it's own use absolutely, and in the event aforesaid I direct the Trustees of my Will to deliver or pay "the residuary trust fund" and so much of the income thereof, if any, as then remains, to the said Ursuline Religious of Diocese of London Ontario for its own use absolutely forever.

All annual income of "the residuary trust fund", and "the residuary trust fund" itself, was to be under the exclusive control of the Trustees for the purpose of the maintenance, upkeep, and improvement of Windermere, the buying of items suitable for the Museum, and the construction of structures that were compatible with Elsie's vision.

…and to pay the balance of the net annual income of "the residuary trust fund", or so much thereof as the Trustees of this my Will may, from time to time, deem necessary or expedient to the Corporation of the City of London for the maintenance and upkeep and improvement of "Windermere" so long as "Windermere" and "my household furniture and effects" are used by the Corporation of the City of London solely as a Public Park and Museum for the City of London… and if the Trustees of this my Will shall deem it necessary or desirable, and if there shall be a sufficient amount of income, not required for the purposes aforesaid, to enable the Trustees of this my Will to do so, to erect, from time to time, additional buildings and/or make additional improvements to "Windermere" for the purpose of a Public Park and Museum for the City of London but not to exceed at any time the amount of the remainder of the net annual income of "the residuary trust fund".

The Canada Trust Company (now TD Canada Trust) would have eventually become the Trustee of Elsie's Will.

In the event of either of the Trustees of these my Will dying, or remaining out of the Province of Ontario for more than twelve months, or conferred on him, or refusing, or is unfit to act therein, or is incapable of acting therein, I authorize the surviving or continuing Trustee for the time being of the Will, by writing, to appoint The Canada Trust Company to be Trustee in the place of the Trustee so dying, remaining out of Ontario, desiring to be discharged, refusing, or being unfit or incapable of acting therein, and after the said The Canada Trust Company has been appointed a Trustee of this my Will, it shall perform all the duties and have all the powers hereinafter vested in the Trustee of this my Will.

After Elsie died the City of London challenged her Will in Court, and was successful in nullifying Elsie's Will. As a result the City of London gained possession and control of the $1,000,000 dollar Trust Fund Elsie had left. The City spent the entire amount on city projects. With the last portion of the money remaining the City constructed, "The Elsie Perrin Williams Memorial London Public Library, Museum, And Art Gallery" building in 1939 at 305 Queens Avenue; far away from Windermere.

Harriet was allowed to live at Windermere for 45 years until her death in 1979. Windermere was left disused until the newly formed Heritage London Foundation took possession of Windermere from the City of London to do as it liked with Windermere without regard to what Elsie wanted. Elsie's Will appears to have tried to prevent The City Of London from gaining ownership of her Estate should her Will be deternimed not valid or legal; however, Elsie could not have foreseen the City of London nullifying her Will in Court.

In the event of the provisions hereinbefore made in this my Will for the Corporation of the City of London with regard to the use and/or occupation of "Windermere" and/or "my household furniture and effects" and the provisions hereinbefore contained for the payment by the Trustees of these my Will to or this benefit of the Corporation of the City of London for the maintenance, upkeep and improvement of "Windermere" and/or "my household furniture and effects" and the provisions hereinbefore contained for the payment by the Trustees of this my Will or for this benefit of the Corporation of the City of London for the maintenance, upkeep, and improvement of "Windermere" being illegal or invalid in any respect, and in the event of the Corporation of the City of London failing within two years after my decease to have the said provisions validated by the Legislature of the Province of Ontario, I give, devise, and bequeath "Windermere" and "my household furniture and effects" unto the said Ursuline Religious of Diocese of London in Ontario for Brescia Hall for its own use absolutely forever, and I direct the Trustees of this my Will, in the events aforesaid, to transfer and/or pay "the residuary trust fund" and the accumulations of income, if any, to the said Ursuline Religious of Diocese of London in Ontario for its own use absolutely.

The Elsie Perrin Williams Memorial London Public Library, Museum, And Art Gallery building was sold to Farhi Holdings Corporation in 2005 for $1,000,000 dollars after the London Public Library moved to much larger premises at 251 Dundas St. The Heritage London Foundation wanted the $1,000,000 dollars, but the City of London controllers denied this, and the money went to paying down the London Public Library's debt. The former library remains vacant in 2018.

Elsie is buried at Windermere next to her beloved husband, Hadley, in a large marked gravesite. The graves of her dogs are near them. The sundial Elsie mentions in her Will is now gone except for the remaing stone stand.

I desire that I shall be buried in the garden, south of the sundial, in "Windermere", next to my late husband.

The grave markers for her pet dogs are becoming worn and overgrown with lawn grass.

Despite a copy of Elsie Perrin Williams Last Will and Testament being in the public archives of the London Room at the London Public Library the falsehood that Elsie bequeathed her Estate and Trust Fund to the City remains still in the public mind. This inaccurate information is perpetuated by the City of London, the London Heritage Foundation, the London Public Library, and by The Canadian Register of Historic Places.

1934 Elsie Perrin Williams, the only child of Daniel S. Perrin of the Perrin Biscuit Company, dies, leaving a large bequest to the city, a portion of which was used to build the new Central Library. [Inaccurate]

Source: London Public Library History

Her will gave Harriet Corbett, their housekeeper, a life tenancy at Windermere, after which the estate would pass to the City of London on the condition it be maintained as a park and a museum. By the time of Harriet's death in 1979, much of Harriet's residual legacy had been disbursed. The newly formed Heritage London Foundation stepped in to support and preserve the property. [Inaccurate]

Source: Sign at Windermere.

On her death, in 1934, Elsie Perrin William, willed the estate to the City of London, to be preserved as a public park. [Inaccurate]

Source: The Canadian Register of Historic Places

It was built [Elsie Perrin Williams Memorial Library] between 1939 and 1940 using funds left by Elsie Perrin Williams, a prominent Londoner, who also willed the Elsie Perrin Williams Estate to the city. [Inaccurate]

Source: The Canadian Register of Historic Places

Today, Windermere is owned by the City of London, and is used for events such as:

Weddings (indoor, outdoor, all season, themed weddings)
Anniversaries
Corporate events
BBQs
Seminars
Wine and Cheese Events
Antique Shows
Craft Shows
Workshops
Photo Shoots
Family Picnics
Garden Parties
Engagement Parties
Fundraising Events
Christmas Parties
Showers (Bridal / Baby)
Celebration of Life Services
Meditation / Yoga

Some funding comes from revenue generating events, but most funding comes from City of London tax money.

Except for the public park, nothing that Windermere is today is what Elsie Perrin Williams had wanted it to be after her death, as written in her Will. The City of London tore up Elsie's Will, robbed the Trust Fund, stole her property, and spent every last cent of Elsie's money on what the City wanted, and not how Elsie had wanted. Elsie Perrin Williams is clear in her Last Will And Testament that she did not want the City of London to ever own her estate.

Daniel and Alica Perrin are buried in Mount Pleasant Cemetary in London, Ontario. The Perrin monument is located in Section C of the cemetery.

© Trevor Dailey

This article is revised from time to time.

 

Dear Editor,

As regards the article, "Sky's The Limit", by Peter Muggeride (Zoomer Magazine, May 10, 2010, Volume 26. Number 3).

There were no Arrow prototypes built. The first five Arrows that were produced and flew were built on production tooling, and were Mk I Arrows. These aircraft were powered by the interim American Pratt and Whitney J-75 engine used for the initial flight tests. The newly designed and much more powerful Canadian Orenda PS-13 Iroquois engine was to be the production engine for all Arrows after the Mk I. Eliminating the prototype stage enormously reduced the cost of the Arrow programme.

In January, 1956, the United States Air Force officially notified Orenda that the USAF would only be interested in the Arrow if the Arrow were fitted with the Iroquois engine instead of the J-75 engine that was of lower power. The USAF also indicated it would be interested in the Iroquois engine for use in American aircraft including their B-52 bomber. The U.S. had loaned an Air Force Boeing B-47 bomber to Avro to be used in the Iroquois engine testing, the engine being mounted near the tail section of the B-47.

France also approached Orenda, through the French Air Ministry, for the possible use of the Iroquois engine in the Mirage IV. France was considering the purchase of at least 300 Iroquois engines. On October 31 1958, France concluded the Iroquois programme was cancelled, or was about to be cancelled, and therefore could not risk obtaining the engine for their aircraft. How the French learned this is unknown. The Iroquois engine was just as successful as the Arrow aircraft, and the engine met the same cancellation and destruction fate. Surviving Iroquois engines were made unserviceable at cancellation by deliberate damage.

The cost of the Avro CF-105 Arrow programme was actually decreasing at the time of cancellation, as admitted to by the government responsible for the cancellation of the programme. As outlined in a lengthy letter on January 12, 1959, to the Defence Minister from the Chief of the Air Staff, a reduction cost of $452.5 million to the Arrow programme was a direct result of the substitution of the more expensive Astra/Sparrow fire control and missile system with the less expensive MA-1/Falcon/MB-1 fire control and missile system for the Arrow aircraft. The Royal Canadian Air Force had pushed to have the Sparrow missile for the Arrow while Avro had wanted the Falcon missile used from the very start. This revision to the Arrow programme helped reduce the 1959 to 1960 cost from a peak of $447 million to a peak of $245 million. At an estimated total programme cost of $702 million for 100 operational Arrow aircraft from April 1958, the Arrow programme development cost was on par with the cost of U.S. aircraft programmes, and the Arrow was superior to any other comparable aircraft in the world. With an estimated fully completed cost of $3.5 million each (about $26 million each in 2010 dollars) for approximately 100 Arrows, the Arrow cost was an incredible bargain for Canada!

Had the Arrow aircraft gone into squadron service by September 1960 as expected, it is most certain other countries would have bought the Arrow in the years following thus driving the Arrow cost down even more.

RCAF CF-100 (Avro CF-100 'Canuck') equipped squadrons 410 Cougar, 428 Ghost, and 433 Porcupine were to be completely Mk II Arrow operational squadrons in 1961 (410, 428), and in 1962 (433).

The Ministry of Supply for the United Kingdom was granted permission by the Canadian government in 1958 to evaluate the Arrow programme. Consideration was given to licence production of the Arrow in the UK at an estimated cost of $3.2 to $3.7 million per Arrow. UK interest declined after the UK concluded the Arrow would not be ready for UK production soon enough for the Royal Air Force needs. After cancellation, the UK renewed its interest in the Arrow wanting to obtain completed Mk I Arrows for use as research aircraft for the British Aircraft Corporation TSR-2 programme. The Canadian government refused.

The USAF also indicated interest in the Arrow after its own evaluation of the Arrow programme was granted by the Canadian government. A U.S. proposal in December, 1957, was to have American purchased Arrows stationed in Canada, but as the Arrow programme proceeded, by 1958, as the Arrow was proving itself, the USAF decided to develop the North American F-108 instead; an aircraft that would be cancelled in September 1959.

Defence Minister Pearkes stated on July 8, 1958, Canada could afford the Arrow alone, but not the Arrow, the American Boeing  CIM-10B Bomarc missile, used for the defence of the American Strategic Air Command, and the American Semi Automated Ground Environment (SAGE) system the nuclear armed  Bomarc missile needed to operate. The Arrow did not require the American SAGE to operate as Pearkes inexplicably believed. Incredibly, the outstanding and proven Arrow would be cancelled, and Canada instead acquired the US Bomarc missile, an untried, unproven, ground launched anti-bomber missile that was later shown to be a complete failure for Canada's air defence.

Prime Minister Diefenbaker announced the immediate cancellation of the Arrow and Iroquois programmes in a surprise announcement to the House of Commons on February 20, 1959, one month before his government said it would review the Arrow programme, and on the very day the first Iroquois engine equipped Mk II Arrow, number 206, was scheduled to be completed. This unexpected announcement forced Avro and Orenda to cease all work on the Arrow and Iroquois, and resulted in the immediate termination of employment for approximately 14,000 to 25,000 workers. In the years following the cancellation, many of these former Avro employees found their way into the American and British aerospace industry, working on projects like the British Concorde, using Arrow flight data, and the American Apollo space programme.

Arrow 206 was 98% complete and was being fitted with the Iroquois engines on the day of cancellation. Arrow 206 was anticipated by many to set new world records of speed and altitude on its first flight that was excepted to take place on March 5, 1959. Arrow 206 was to be accepted by the RCAF in March, 1959, and was to be the first RCAF Mk II Arrow.

The Canadian National Research Council desired at least one Arrow example for research purposes after the cancellation, but the NRC lacked the necessary funds to fly and maintain the aircraft.

In early 1960, only one year after the Arrow programme had been cancelled, the Canadian government was confronted with a request from the US through NORAD for supersonic jet interceptor aircraft in Canada to replace the cancelled Arrow. The issue for the Diefenbaker government was that of the protection of Canada, and not one of cost.

In 1961, after political stalling, the Diefenbaker government quietly acquired 66 used and aging McDonnell F-101B Voodoo aircraft, a type that had previously been determined to be inferior to the capabilities of the Arrow and inadequate for Canada's defence requirements, from the United States to replace the cancelled Arrow. The multi-million dollar Arrow programme was deliberately turned into a few hundred thousand dollars worth of scrap metal by the Diefenbaker government.

The five completed Arrows had met and exceeded all the design specifications for the Arrow programme during the mere 70 hrs and 30 minutes of total flight time they had.

The Diefenbaker government never officially gave cost as the reason for cancelling the Arrow, and never made the reason for the cancellation clear.

Thank you.

Trevor Dailey

© Trevor Dailey

Reference Notes

[1] "Until recently, high-performance aircraft were not committed to production until after flight testing of one or more prototypes.... The Arrow programme is unusual in Canada in that even the first flying model has been built on production tooling." - Avro News, October 4, 1957.

[2] "(G) The balance of the [Iroquois] engines and parts are to be mutilated to the extent that they cannot be assembled in the form of an engine .... " - Arrow/Iroquois Termination, Direction A15 0-13, April 7, 1959.

[3] "(d) The result of substituting MA-1/Falcon/MB-1 for Astra/Sparrow together with a close analysis of the programme has resulted in an overall saving of $642.9 million for 37 preproduction and 169 production aircraft or a $452.5 million saving on the programme for 100 operational aircraft.

(e) The programme submitted on 13 August, 1958, for 100 operational aircraft listed a flyaway price of $5.0 million, exclusive of sales tax, for 80 production aircraft. This programme also showed an anticipated recovery of 20 aircraft from the 37 aircraft development programme.

(f) For the revised programme from which 100 operational aircraft will be obtained, the flyaway cost for 92 production aircraft is $3.75 million. The programme included the recovery of 8 operational aircraft from the 20 aircraft development programme.

(g) The rate of annual expenditure for the revised programme reduces the yearly spending for the programme submitted to CDC 8 August, 1958, from a 1959/60 forecast of 383 million and a peak of 447 million to a 1959/60 forecast of 162 million and a peak of 245 million. (h) The revised programme from which 100 operational aircraft will be obtained would cost approximately $702 million from 1 April, 1959"- Air Marshall Hugh Campbell, to Minister Pearkes, January, 12, 1959.

[4] "Arrow costs compare favourably with the some what less sophisticated aircraft in the U.S.A. .... It has been interesting to learn that the RCAF flyaway costs for the CF-100 from production were less than for the comparable F-89 Scorpion. Similarly, quantity production of the F-86 and T-33 was undertaken in Canada at a lower per aircraft cost than from U.S.A production ... [Q]uantity production of an aircraft as complex as the Arrow can be undertaken in Canada at a cost comparable to that for production of a like aircraft in the U.S.A." - RCAF Chief Aeronautical Engineer, Memo., March 28, 1958.

[5] "The Minister [Pearkes] has forwarded to me a copy of a letter he received from Mr. Fred T. Smye of A.V. Roe Canada Limited, which makes a proposal for a fixed cost estimate for the production of 100 CF105 aircraft, at an approximate cost of $3.5 million." - (Charles Foulkes) General, Chairman, Chiefs of Staff, 4 November, 1958.

[6] "(c) The adoption of the MA-1/Falcon/MB-1 fire control and weapons to the CF-105 programme has reduced the development time and will permit operational aircraft to be delivered for squadron use by September 1960 in place of the spring of 1961" - Air Marshall Hugh Campbell, to Minister Pearkes, January, 12, 1959.

[7] "If this [Arrow] were the only requirement for our air defence, we could perhaps make provision for it in our succeeding defence budgets; but in order that aircraft of this type and the type to be used by the United States can operate in Canadian airspace we will be required to introduce SAGE in Canada. " - Top-secret brief, Defence Minister Pearkes, July 8, 1958.

[8]"Mr Speaker, with the leave of the House I should like to make a somewhat lengthy statement on the subject of one facet of the national defence of Canada.... The government has carefully examined and reexamined the probable need for the Arrow aircraft and Iroquois engine known as the CF-105.... The conclusion arrived at is that the development of the Arrow aircraft and Iroquois engine should be terminated now." - Prime Minister John G. Diefenbaker, February 20, 1959 (Black Friday).

[9] "Following the Prime Minister's statement we have received wires from the Government, instructing us to immediately cease all work on the Arrow and Iroquois programmes at Malton and by all suppliers and subcontractors. As a result, notice of termination of employment is being given to all employees of Avro Aircraft and Orenda Engines, pending a full assessment of the impact of the Prime Minister's statement on our aeronautical operations. We profoundly regret this action but we have no alternative since the company received no prior notice of the decision and therefore we were unable to plan any orderly adjustment." - (signed) J.L. Plant for President and General Manager, February 20, 1959.

[10] "Mr. Quarles's answer was cautious in realizing the Canadian dilemma but stated that in general terms they [USAF] would like to have interceptors in Canada in place of those cancelled.... General Twining reiterated that the manned bomber would remain in the threat for a number of years." - Top-secret message from Air Vice Marshall Hendrick to General Foulkes, April 7, 1959.

[11] "If the Committee reported that security demanded the acquisition of these aircraft [F-101 Voodoo], then that would have to be the decision. To purchase them, however, would cause great difficulties. It would place him [Prime Minister Diefenbaker] and the Minister of National Defence in impossible positions. On the other hand, failure to reequip would be bad for the morale of the RCAF. He [Diefenbaker] thought the public had been convinced of the wisdom of the government's decision to cancel the Arrow. To obtain other aircraft now in the face of statements that the threat of the manned bomber was diminishing and that the day of the interceptor would soon be over would be most embarrassing unless a reasonable explanation could be given. Additional Bomarcs in Canada might be an alternative. The committee should first examine carefully what had been said publicly by himself [Diefenbaker] and other Ministers about canceling the Arrow and, in light of that, consider what was possible. In any event, the safety of the nation should be paramount consideration no matter what the consequences. He [Diefenbaker] had been against cancelling the Arrow but had been persuaded otherwise." - Cabinet record, February 6, 1960

[12] U.S. evaluation of the Arrow programme, from October 31 to November 1, 1955.

[13] "The Minister (Through Deputy Minister) Arrow Cancellation - Disposal of material 1 In your approval to my recommendation of 13 March 1959 on courses of action to be taken in respect to disposal of material arising out of the cancellation of the Arrow, you desired to be informed before final action was taken on the method of disposal being considered for the disposition of the airframes and the Iroquois engines. 2 Two methods may be followed:

(a) Declaring as surplus material to Crown Assets Disposal agency. This course is not recommended for the reason that this agency has the prerogative of selling the material in its original state. This course could lead to subsequent embarrassment, that is, air-frame and engine could conceivably be placed on public view or even, in fact, used as a roadside stand. This, I am sure, you will agree is most undesirable.

(b) Relinquishing and DND interest in the air-frames and engines to DDP for ultimate disposal by that agency. In this case DDP can reduce it to scrap. This course is recommended.

I would appreciate being advised whether you concur in the method recommended.

(Hugh Campbell) Air Marshal Chief of the Air Staff CC: Deputy Minister" - March 26, 1959

[14] "One complete cockpit in the configuration established by the RCAF is to be made available to the Institute of Aviation Medicine." - Arrow/Iroquious Termination Direction A15 0-13, April 7, 1959

 

No child killer should take solace in the passage of time.

The Unsolved Homicide of Karen Lee Ann Caughlin

Karen Lee Ann Caughlin of Sarnia, Ontario was brutally murdered on March 16, 1974. Karen Caughlin was a 14 year old, 9th grade student, described as being about 167cm (5 foot, 5 inches) tall, and weighing about 46kg (101lbs). Karen had long dark brown hair, and hazel eyes. On the day of her murder, Karen was wearing a white V-neck sweater with a tie in the back, a pair of GWG blue jeans, a short jacket with gold buttons and sheep skin sleeves and collar, red socks, and a Mickey Mouse wristwatch.  

As per usual, Karen attended Sarnia Collegiate Institute and Technical School (S.C.I.T.S.) located at 275 Wellington Street, on Friday, March 15, 1974. This was the last school day before the March Break. After school, Karen went with a female friend from S.C.I.T.S.to her friend's home at 108 Martha Street. Later that evening, the girls left for the Rose Gardens roller skating rink.  Karen spent early Friday evening at 108 Martha Street. Karen and her friend were allegedly picked up hitch hiking near the intersection of Mitton Street South and Divine Street at about 19:00 (7:00 pm). The lone unidentified male driver is described as being white, and of approximately 30 to 35 years of age. The vehicle is described as being a four door sedan type vehicle of an unknown colour. Karen and her friend were driven to the Rose Gardens roller skating rink by this unidentified male, and were dropped off in front of the roller rink. The unidentified male is claimed to have mentioned to the girls he had children their age. (Source: Caughlin Family Press Conference, May 31. 2011.)  

Karen and her friend stayed at Rose Gardens until closing time at about 23:00 (11:00 pm).During Karen's time at Rose Gardens, Karen made tentative plans to stay the night at another female friend's home. As Karen and her Martha street friend made their way from Rose Gardens at closing time, they accepted a ride in a pick-up truck from two teenage boys they knew. A short time later, Karen's friend was dropped off at her home at 108 Martha Street. Karen remained in the truck, and she and the boys continued to drive around, picking up another teenage boy. The three boys and Karen cruised the city, made a purchase at a local A&W restaurant, and visited other friends.

On early Saturday, March 16, 1974, at approximately 01:00 (1:00 am),Karen was dropped off at her request in front of her other friend's home at 238 Brock Street South where Karen indicated she was going to spend the night. Karen lived at 171 Brock Street South. Karen apparently never entered the 238 Brock Street South residence. Karen's movements for the next 9 hours are unknown to investigators.  

At around 9:50 to 10:00 (9:50 am to 10:00 am), on Saturday, March 16, 1974, Karen's lifeless body was discovered in a small ditch about 1 metre from the west side of Plowing Match Road (known as Clare Freer Side Road and Enniskillen Side Road 6-7 at the time), approximately 1.6 km south of Churchill Line (Highway 14), by Fred Bygrove, an area farmer, who was driving northbound. Karen was found laid in a face up position on the ground. There was noticeable amounts of blood at the scene. Cuts and bruises covered Karen's body. Karen had injuries that were consistent with being struck and run down by a motor vehicle.  

Evidence indicates Karen was severely beaten before being run over by her killer. The postmortem examination of Karen's body confirmed internal hemorrhaging as the cause of Karen's death. Karen's fatal injuries were a direct result of being struck and run over with a motor vehicle. Police investigators believe Karen's body was left at the side of the road after she had been murdered at an unknown location, and Karen's killer(s) attempted to make Karen's death appear as a hit and run to cover-up her murder. Not far from Karen's body, the coat and shoes Karen had been wearing that night were located partially concealed in some branches. Apart from her coat and shoes being removed, Karen was fully clothed. Karen's purse was found days later in a roadside ditch by a young citizen along Oil Heritage Road (Highway 21), approximately 5 km south of Wyoming, Ontario.  

Karen was the victim of a vicious assault, and identification was difficult. A description of Karen was broadcast over area radio stations in an effort to identify her. It took police nearly two days to notify the Caughlin family after Karen's body was found, the school ring Karen was wearing was the clue to her identity. School staff and students at S.C.I.T.S. looked over student photographs until Karen was identified. At the morgue, a birth mark on Karen's leg was all that Karen's two young sisters could positively identify Karen by. Karen's parents were unable to bring themselves to visually identify the battered and broken body of their murdered young daughter.

Evidence found on Karen's body included paint chips that police investigators traced to the factory paint used on Chrysler/Dodge/Plymouth high performance type vehicles manufactured in the years 1970 and 1971. The paint colour is a metallic purple called, "Plum Crazy" by the manufacture.  Karen's murder was actively investigated from 1974 to 1976 without closure. Karen's killer(s) was not found.

Karen's murder case was shelved by the O.P.P. until Karen's family unexpectedly received contact from the O.P.P. in 2003. Investigators had remained silent for almost three decades despite the Caughlin family requesting to be kept informed of the progress of Karen's murder case. Evidence suggests Karen fought for her life against her killer(s) before she was murdered. This brave act may have left key evidence to solving the case, and finally knowing the identity of Karen's killer(s). Some blood found by police investigators was determined not to belong to Karen. It is the blood of her killer. During her fight for her life with her attacker, Karen injured him enough to make him bleed. Decades later, O.P.P. investigators conducted a review examination of the physical evidence in Karen's murder case and discovered this inexplicably overlooked blood evidence. In 2005, this newly found blood evidence from 1974 was used to create a D.N.A. profile that can be matched to a particular male. This particular male is the person wanted for the murder of Karen Lee Ann Caughlin on March 16, 1974.  

To this day, Karen's killer(s) is unknown. The killer(s) who ended Karen's life in an act of violence and brutality, who forever destroyed the lives of her family, and then callously got on with his life. It is certain someone knows the identity of the criminal(s) who murdered Karen. It is certain someone knows the details of Karen's murder, and who was involved. It is certain someone holds the one piece of the puzzle that will solve this case once and for all. Someone has crucial information, no matter how insignificant he or she may think it is, that will bring a close to a chapter in this nightmare for Karen's family, and will see that justice might finally be done. This person must step forward now.

© Trevor Dailey  

The OPP Criminal Investigation Branch and the Lambton County OPP Crime Unit are reminding the public that this is still an ongoing investigation and anyone with any information is urged to contact the OPP. A $50,000 reward has been offered for information leading to the arrest and conviction of the person(s) responsible for this murder. 

 Any person having information regarding the person(s) responsible for the murder of Karen Caughlin should click here and submit a message directly to investigators, or telephone the O.P.P. at: 1-888-310-1122. The O.P.P. File Number for Karen Caughlin's unsolved murder is: 04-11. You may also contact your nearest police authority, or your local Crime Stoppers at: 1-800-222-TIPS (8477), or submit information to Crime Stoppers online D.N.A. evidence in this case can allow a witness to identify the person(s) responsible for the murder of Karen Caughlin and remain anonymous.