Kitco moves into creditor protection

www.vancouversun.com

Faced with tax claims of more than $300 million from Revenu Quebec, embattled Montreal-based gold trader Kitco Metals Inc. now is officially in creditor protection, until July 27.

Superior Court Judge Mark Schrager this week granted the application by the company and its monitor, RSM Richter.

It's now spared from any legal proceeding until it submits an offer to creditors, the largest of which is Revenu Quebec, which has outstanding assessments against it of $227 million and $85 million.

Kitco, which is contesting the tax assessments, can continue to carry on business as before under the court ruling.

The company was one of more than 100 targeted in a Revenu Quebec investigation that last month resulted in searches and seizures at 70 locations in and around Montreal.

The tax department said a false-billing scheme in Quebec's gold market had snowballed into a fraud of more than $100 million.

Kitco has denied doing anything illegal.