Edmonton paper recycling firm faces shutdown on violation of lease clause

CALGARY (Scrap Monster): The deadline of Monday given by City officials to Greys Paper Recycling Industries is unlikely to get extended. The company’s plea towards extension of the deadline has been turned down. The City officials state that they remain firm on the Monday deadline, failing which, the assets of the company would be seized.

According to the lease clause, the rent payments must be made from sales revenue and that the investor capital should not be utilized for making rent payments. According to the company management, the company has been doing no sales for the time being on account of shutdown for some equipment upgrades.

Meantime, Rajan Ahluwalia, CEO, Greys Paper stated that he has enough money from investors to pay the rent. However, city officials are firm on the lease clause and want the rent payment to be paid from sales revenue. According to Greys Paper, it may take at least three more months before the equipment upgrades are completed. The company’s request to grant a three-month extension to pay the bill has been rejected.

However, city officials confirmed that if the company fails to act on a breach of its lease agreement, it would seize the building and the machinery.

Earlier in 2009, the city had invested $9.4 million in Greys. The company manufactured paper products using post-consumer paper and cotton. The company was forced to upgrade its plant following complaints that its products jammed in high-speed photocopiers.