Ship Comes in - Local Media Misses Boat

Update: At the time this story was published I was unaware that the Telegram's Rob Antle had alredy done a piece on the same topic. Never the less, the fact remains that two local media outlets neglected to bring the public the full picture. I'm glad however that one paper (run out of Quebec) did bring the facts out into the light of day.

My disdain of the mainstream media is something that’s grown on me over the past few years. The reason is simple. Most media outlets are lazy in their approach and for whatever reason they have an innate ability to continually bring the public slanted and incomplete stories.

While my disgust is usually focussed on national outlets like the Globe and Mail or National Post, our local media is not much better.

Recently a story ran in the Newfoundland and Labrador newspaper, The Independent. The same story was also covered by provincial radio station VOCM, which proudly bills itself as a winner of the Edward R. Morrow award for journalistic excellence. Both services highlighted a Florida based company, CALA Corp. and told us all about how CALA's future development plans might mean thousands of local jobs in the province.

According to both services the company is looking to contract a local shipyard for the construction of floating resorts and condominiums. CALA will finance the building of several mega ships by pre-selling residences then anchoring the newly minted vessels in resort areas around the world and in doing so provide ocean front living accommodations where very little ocean front property remains available.

Both the Independent and VOCM reported that the company had been in contact with the provincial government about its plans and was awaiting approval to move forward.

The Independent went so far as to quote a spokesperson with the company who said that in four years the operation could create as many as 25,000 local jobs.

When the story first came to my attention I immediately thought how great this would be for the local economy. My second thought was to wonder why neither The Independent or VOCM had questioned the veracity of CALA Corp’s claims or reported anything at all about the makeup of the company.

Instead of offering the public with hard facts these supposedly unbiased news stories presented only the information provided by a company spokesperson and in doing so left the distinct impression CALA might single handedly end the unemployment problems in our province for decades to come.

I don’t know if anyone ever told the our local reporters but there is an old saying, “if something sounds too good to be true it probably is.”

Since the mainstream media appeared uninterested in doing its job I figured I might as well see what CALA Corp was all about. Here’s what I found out.

According to their latest annual report, dated August 2, the company has suffered net losses of between $800 thousand and $900 thousand in each of the last two years. As of a few weeks ago the company’s liabilities exceeded its assets, meaning CALA Corp is essentially broke.

As reported, CALA is a company that plans to finance their multi-million dollar projects by pre-selling units, but who will the buyers be?

Ask yourself, "If I had hundreds of thousands or even millions of dollars to buy a luxury getaway would I be willing to hand that money over to a company on the edge of bankruptcy in the hope they can sell enough units to actually build it?"

CALA Corp is not a major corporate entity. In fact the board of directors of CALA Corp. consists of only three members, Joseph Cala, Ray Francis and Larry S. Pfautsch.

Joseph Cala, the company’s founder, is also its Chairman, Chief Executive Officer, President, Chief Financial Officer and Principal Accounting Officer.

While the company has been bleeding red ink, Mr. Cala pays himself a salary of $300K a year.

The one shining light is that Mr. Cala appears to be quite honest in his reporting on the company’s finances. He even noted in the company’s annual report that there are major concerns about CALA’s ability to continue as a viable entity.

In the report plans for an ocean based resort development, the need to find a shipyard, the company’s lack of experience and its dire financial position are highlighted.

I’m not saying CALA won’t find a way to succeed in their efforts. I wish them well in it, but I think it’s fair to say that after learning more about the company my estimation of the chances that 25,000 people will actually be working on CALA projects in the next few years is somewhat diminished. Something a fair and unbiased news report might have informed me of if a little time had been taken by those who covered the story.

I don’t want to put too much emphasis on this with my friends in the mainstream media, and I do consider many of them friends in that they’ve been very supportive of my efforts up to now (if not after this article) but maybe the next time you might want to consider doing more than reporting on what the people directly involved have to say.

By the way my research took about 5 minutes thanks to a fantastic new software program called Google. You should check it out sometime.

CALA Corp - Annual Report Excerpts:

Twelve-Month Plan of Operation.

...The Registrant plans to build the first UnderSea Resort & Casino, the first Undersea Residence, and the first Residence Fractional Ownership. The first development will be the residence and the fractional ownership, and the project will be financed from pre-selling individual units…

…During the twelve months forward the Registrant plans to complete the development phase of the Undersea Resort and finalize plans for securing the financing and construction of the resort. The Registrant will secure the yard to build the resort and contract for its construction.
Risk Factors Connected with Plan of Operation.

Limited Prior Operations, History of Operating Losses, and Accumulated Deficit May Affect Ability of Registrant to Survive.

The Registrant has had limited prior operations to date. Since the Registrant's principal activities recently have been limited to seeking new business ventures, it has no recent record of any revenue-producing operations. Consequently, there is only a limited operating history upon which to base an assumption that the Registrant will be able to achieve its business plans. In addition, the Registrant has only limited assets. As a result, there can be no assurance that the Registrant will generate significant revenues in the future; and there can be no assurance that the Registrant will operate at a profitable level. Accordingly, the Registrant's prospects must be considered in light of the risks, expenses and difficulties frequently encountered in connection with the establishment of a new business.

The Registrant has incurred net losses: $798,862 for the fiscal year ended December 31, 2005 and $904,233 for the fiscal year ended December 31, 2006 including discontinued operations loss of $11,516. The Registrant's current liabilities exceed its current assets by $62,221 as of December 31, 2005 and $114,027 as of December 31, 2006. At December 31, 2006, the Registrant had an accumulated deficit of $11,886,789. This raises substantial doubt about the Registrant's ability to continue as a going concern…

A complete copy of this report can be obtained by contacting higginsmyles@yahoo.ca or by searching Google for “CALA Corp Annual Report” (Sorry, I couldn’t resist)