A rising star of the Yellowknife business community is looking forward to starting fresh and returning to its former glory with the retirement of two of its executive members.
Roy Erasmus Jr., former president and CEO of Det’on Cho Corp., announced his resignation last week, as did vice-president of the organization’s mining and construction division Rick Miller.
Taking Erasmus’ place is Bob Murphy, who was appointed co-president for restructuring purposes in early January. Murphy has worked for Det’on Cho in some capacity for the last two decades. Replacing Miller is Buddy Stroich, former president of the Gwich’in Development Corp.
Murphy said Erasmus’ reason for resigning was “between him and God,” and refused to comment on Miller’s departure.
The move comes following a series of financial woes that have beleaguered the Yellowknives Dene First Nation (YKDFN) owned company for the last few years.
The problems started when Det’on Cho took on the Ingraham Trail realignment project in 2012, Murphy said, a $16-million contract to build a 5-km bypass around Giant Mine at Highway 4.
“I wasn’t here but, from the financial records I’ve read and my discussions with Mr. Erasmus and Mr. Miller, we found that whatever could go wrong did go wrong,” Murphy said. “They started the project and things went all haywire and they lost a lot of money.”
Murphy didn’t specify all of the problems that had hindered the project, but did note that tough conditions of winter construction exacerbated issues as they popped up.
“They did the project in the wintertime,” Murphy said. “Winter costs are about three times summer costs. They put a lot of money into it and they had to hire somebody else to finish it.”
After sinking over $10 million into the bypass, the mounting costs began to have a deep impact on the company, though YKDFN came out relatively unscathed.
For the fiscal year of 2014, the corporation filed net losses of $3.3 million and $156,318 in unpaid rent and leases. The year previous, they reported a net income of $152,318 after receiving revenues of $83 million.
With all the financial pressures, Det’on Cho was unable to make its payments to contracted companies and late last summer was hit with a $97,263 lawsuit by Bassett Petroleum Distributors.
“Since I’ve been here, I’ve talked with Mr. Bassett and I’ve made an arrangement with Mr. Bassett that he’s satisfied with and he’s getting repaid,” Murphy said, though he did not release details of the agreement.
It’s been a far fall for the corporation that took home the Yellowknife Chamber of Commerce Business of the Year award in 2013 and was named one of the 500 fastest-growing companies in Canada by PROFIT Magazine the same year.
Now, Murphy is hoping to help the company climb back to the top.
“Basically within the next few weeks, we hope with all our businesses and all our joint ventures, our situation will be resolved,” Murphy said. “We’ll be ongoing as a business again without any troubles; there’s lots of business for the company.”