Gen7 Fuel is publicly speaking out against KMPG Inc., claiming the court-appointed monitor overseeing the insolvency of its former fuel supplier has engaged in a “deliberate campaign to influence its banking partners to close its accounts and freeze assets.”
In a news release issued Wednesday morning, Gen7 Fuel President Mat McLeod said the First Nations chain of discount gas stations has no relationship with Original Traders Energy (OTE) — an Indigenous-owned business headquartered on the Six Nations of the Grand River Territory that supplied heavily-discounted fuel in bulk to Gen7 gas stations up until 2022 — and does not owe money to its former fuel supplier.
Gen7 Fuel claims that OTE cancelled all of its contracts in the summer of 2022 without notice, "leaving the retail chain to find alternative fuel supply."
"Each time KPMG has told one of our banking partners to refuse our business, the banks have followed the court-monitor's advice," said Mcleod in the release. "However, once we've been able to meet with our banking partners and explain that we have no relationship to the OTE and its CCAA process, the banks have resumed their relationships with us, at least temporarily. Our reputation has been harmed and the continued attacks on our banking arrangements has impaired our ability to manage the millions of dollars a day in fuel and convenience store transactions."
The claim made by Gen7 Fuel comes at a time when OTE is restructuring its finances after former employees and their associates allegedly misappropriated millions of dollars to build the Gen7 Fuel brand while financing a luxurious lifestyle of private jets, exotic vacations and a $4-million yacht originally named ‘Cuz We Can.’
Those allegations were first made public by SooToday, after court documents revealed that OTE co-founders Miles and Scott Hill launched a multi-million dollar lawsuit against Glenn Page, his wife Mandy Cox and a number of Page's business associates in 2022.
None of the allegations have been proven in court. In an affidavit filed as part of the insolvency proceedings, Page denies all the allegations against him, calling them "unfair and untrue."
OTE was granted protection from creditors in January 2023 through the Companies' Creditors Arrangement Act (CCAA), a federal law that allows insolvent corporations with debts exceeding $5 million to restructure their business and financial affairs.
Court documents from CCAA proceedings show that OTE owes more than $310 million in unpaid fuel and excise taxes to the Ministry of Finance and Canada Revenue Agency, in addition to more than $40 million owing to a lengthy list of creditors.
Earlier this year, the Ontario Superior Court of Justice granted a motion during OTE insolvency proceedings to freeze all of Page's worldwide assets. The non-Indigenous businessman responsible for founding the Gen7 Fuel brand is also being investigated by the Economic Crimes and Corruption Unit of the Ontario Provincial Police over a matter of missing computer data, court documents show.
Gen7 Fuel currently has six locations in Ontario: Aamjiwnaang First Nation (Sarnia), Bkejwanong First Nation (Walpole Island) Curve Lake First Nation (Kawarthas), Nipissing First Nation (North Bay), Batchewana First Nation (Sault Ste Marie), and Couchiching First Nation (Fort Frances). Each of the gas stations is majority owned by First Nations community members, according to the Gen7 news release.
McLeod said Gen7 Fuel is now looking at legal options aimed at preventing “any further harassment and potential interruption of our business” at the hands of OTE’s court-appointed insolvency monitor. “KPMG is not only harming us, it is also threatening the financial welfare of our employees, suppliers and the Indigenous communities we serve,” McLeod said in the release.
A spokesperson for KPMG has since denied McLeod's allegations.
“KPMG is the court-appointed monitor of the OTE Group’s application under the Companies' Creditors Arrangement Act (CCAA). Gen7 Fuel is not part of these CCAA Proceedings and we have not had the alleged discussions with Gen7’s banking partners,” KPMG said in an email to SooToday Wednesday. “We take our duties as the monitor very seriously and act in accordance with all requirements, and deny all allegations of wrongdoing on the part of KPMG.”
Gen7 Fuel was OTE's largest single customer prior to the restructuring process, according to its news release, often purchasing five million litres or more of gasoline products a week.
