Barry Styles, CEO of Highwood Communications in Calgary, says he’s open for business despite seeking creditor protection and facing a possible government investigation of his books.
Highwood, which has handled the bulk of the Alberta provincial government’s media buying for the last 12 years, received a reported $6.5 million in billings from the provincial government this year. But after losing that account in a review to DDB Edmonton in June, the agency sought creditor protection for $5.3 million in unpaid bills, mostly owed to media outlets.
“Highwood Communications is not in bankruptcy,” Styles told Marketing. “A proposal was submitted to the creditors, which was 99% approved. Going forward with a reorganization of Highwood, we are no longer in the media buying business. That is all that happened.”
Despite the closure of the media division, Highwood’s creative, production and strategic planning divisions remain open, he said.
When asked to account for the unpaid media bills, Styles said he was “not sure” what happened.
Earlier this week Styles had a similar response for the Edmonton Journal.
“If I had the answers, I wouldn’t be in this situation. It went to all the accounts payable as best as we could make it happen.”
Alberta Liberal leader Kevin Taft has called on the province’s auditor general to investigate the agency’s records, calling the situation “highly suspicious” and questioning where millions of taxpayer dollars went, if not to pay media bills.
The Canadian Press reported that the Auditor General of Alberta had begun a system audit, but Lori Trudgeon, a spokesperson for the Auditor General, said her office is currently only reviewing the matter to determine if an audit is necessary. The Alberta government said it would support an audit should one occur.
“If the auditor does get involved and does a review of our process, and can find something we can do better, we absolutely welcome that,” said Marvin Luethe, the Alberta government’s director of marketing services.
Luethe said he has received no official word on the matter from Highwood or the affected media outlets, and only began hearing rumours of the agency’s troubles after the June review.
Documents from Highwood’s auditor, Alger & Associates, reveal the company had been operating at a loss for six years. In 2005, Styles began restructuring the company in an attempt to balance the books, but was hindered by ongoing client losses.
The Alberta Weekly Newspaper Association reports that Highwood owes some of its member publications approximately $800,000. Other creditors include Astral Media Radio Group, Rogers Media, Facebook and Pattison Outdoor, which is owed more than $620,000.
Highwood submitted a payment proposal to its more than 350 creditors in July. Of the 107 who responded, all but one accepted the proposed terms, which sees creditors paid approximately 40% of what they’re owed.
