ACE/Security founder on the rocks

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Peter Kovessy
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Offices of controversial security laminate distributor cleaned out

Peter Fabian, the founder and CEO of protective window film company ACE/Security Laminates, has filed for bankruptcy after allegedly racking up a string of debts to hedge funds, investment firms and other creditors totaling more than $5.7 million.

Peter Fabian, the founder and CEO of protective window film company ACE/Security Laminates, has filed for bankruptcy after allegedly racking up a string of debts to hedge funds, investment firms and other creditors totaling more than $5.7 million.

The company, which gained publicity by blowing up cars to demonstrate its shatter-resistant windows, has been publicly accused of misleading distributors by reselling laminates manufactured elsewhere. It's also named in a pair of lawsuits filed against Mr. Fabian, alleged to have defaulted on leases for more than a half-dozen vehicles including a 1996 Bentley Brooklands.

That vehicle is allegedly still in Mr. Fabian's possession.

Meanwhile, the window laminate distributor's Isabella Street office appears to have been completely cleaned out, save for a promotional poster visible through glass doors. A tenant on the floor below ACE's former suite said the firm moved out a couple of months ago, while someone who answered the phone number listed on the company's website said neither Mr. Fabian nor anyone from ACE was available.

Though no records exist of ACE filing for corporate bankruptcy, Mr. Fabian cited a loan to a bankrupt company, along with illness and revenue reduction in a one-paragraph explanation for his personal financial difficulties contained in federal bankruptcy documents.

In 2004, when the price of ACE shares peaked at $1.35, Mr. Fabian was said to have been worth several million dollars on paper. But four years later he reported less than $8,000 in assets and a monthly income of $6,000, according to recent bankruptcy filings.

Among his 53 creditors are a handful of capital management and investment firms. Front Street Capital, along with its founding firm Casurina LP and several individuals of the same Toronto address, are listed as being owed close to $2 million by Mr. Fabian.

Other investment firms listed as creditors are owed an additional $2.4 million. These include Transamerica Life Canadian Equity Fund, Keysten Investments Ltd., Excaliber LP, Strathy Investments Ltd. and The K2 Principal Fund LP.

Federal and provincial tax agencies in Ontario and Quebec are also listed as creditors, as is an Ottawa-based vehicle leasing company that filed a lawsuit against Mr. Fabian and ACE before he declared bankruptcy.

Court documents show Mr. Fabian and his company, alternately referred to as ACE/Security Laminates and its predecessor, ACEClear Defense, entered into five vehicle leases with Surgenor National Leasing Ltd. between April 2003 and June 2005.

It is alleged Mr. Fabian and ACE defaulted on the vehicle leases, which, in addition to the Bentley, include two trucks, a Jaguar XK8 and a Range Rover HSE that cost $1,530 per month.

The leasing company said it is owed almost $140,000 by Mr. Fabian and another $223,000 by ACE/Security Laminates and its "alter egos."

It also asks that the Bentley and Jaguar allegedly still in the possession of either Mr. Fabian or ACE be immediately sold and the proceeds applied against the alleged debt.

Around the same time Mr. Fabian entered into the vehicle leases, ACE appeared to be flush with cash.

In May 2004, ACE went public on the TSX Venture Exchange and sold six million shares, raising $3 million.

As a shareholder in the company, Mr. Fabian reportedly became a multimillionaire on paper when the share price rose from $0.50 in May to a peak of $1.35 a month later.

Later that year in November, the company raised more than $7 million in private placement financing and direct investment in the company.

Despite successfully securing financing, the company subsequently reported an $884,000 loss in the final three months of 2004 on $1.3 million in revenues. In early 2006, the TSX Venture Exchange suspended trading in ACE shares for failing to comply with exchange requirements.

A few months later, the company posted another quarterly loss, this time $672,000 in the second quarter of 2006 on $1.37 million in revenues.

That year, the company was also publicly accused of collecting millions in dealer licensing fees from vendors while reselling and repackaging laminates manufactured in Israel without any further processing.

Mr. Fabian denied these accusations and the company's website maintains it manufactures industry-leading safety films using a proprietary lamination process.

Despite vacating the company headquarters still listed on its website, an ACE official was still painting a positive picture of the company earlier this year.

In an interview with the OBJ in late January, ACE vice-president David Jones said sales had recently increased by 23 per cent and manufacturing output at the company's Gatineau facility had increased by 50 per cent.

Employing 35 people, ACE was poised to benefit from the economic downturn in the United States, said Mr. Jones.

"Typically when there are problems economically, we get the benefit of that because there are usually more security problems, so people tend to need more security measures," he said at the time.

Organizations: Security Laminates, Casurina LP, TSX Venture Exchange Transamerica Life Keysten Investments Strathy Investments Surgenor National Leasing Jaguar OBJ

Geographic location: Toronto, Ontario, Quebec Ottawa Israel Gatineau United States

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  • André Vallerand
    April 30, 2014 - 14:19

    I have 16000 shares bought when Ace Security Laminates when first public. Is Ace filed for bankrutcy or only Fabian or both? Any suggestion regarding what I can do with those 16000 shares. Many thanks. André Vallerand