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Bear Mountain insolvency


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324 replies to this topic

#1 Zoe

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Posted 29 April 2010 - 06:28 PM

There was a suggestion to start a separate discussion for Bear Mountain's creditor protection, legal actions, foreclosures and whatever else comes along. It's pretty complicated already and it may get worse once interchange loans and tax issues are factored in.

Bear Mountain entered creditor protection on March 25, 2010. Information for creditors is available at the monitor's website. http://www.pwc.com/c...ain/index.jhtml

There are seven parties to the latest court order (April 22, 2010) including HSBC, Revenue Canada, the Superintendent of Real Estate, Romspan Mortgage, and the court-appointed monitor.

The respondents include Bear Mountain Development Holdings Ltd, Bear Mountain Resort Management Corp, Bear Mountain Developments Corp, 18 on 18 Developments, Kory Gronnestad and his family trust, Len Barrie and his family trust, and the Mike Vernon family trust. Read the whole list here (page 8-9).

The court orders are mostly legalese, but the affidavits and exhibits are in plain English and they make some brutal statements about mismanagement at Bear Mountain.

I recommend starting with this PDF http://www.pwc.com/e...-005_033110.pdf

From the Bear Mountain construction thread:


Manuel wrote:

2.8 Million projected burn rate at Bear Mountain in 35 days: http://www.pwc.com/e...-012_041210.pdf

payroll over two weeks matches receipts from operations over the same two weeks- ouch! - that doesn't leave much for debt repayment, operating expenses, taxes and the like.

No wonder HSBC had to file for creditor protection - the whole thing was based on ever expanding real estate sales - fine in the short term, unrealistic over time.




#2 Holden West

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Posted 29 April 2010 - 07:36 PM

^Page 10 of that .pdf is pretty interesting.
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#3 integracious

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Posted 04 May 2010 - 09:33 PM

I guess it's just a bit too much for some posters and administrators of this site to keep an open dialogue about this project, both pros and cons in the literal and metaphoric sense. It used to be quite stimulating and challenging back in the earlier days of the [Langford + Highlands] Bear Mountain | 5,000 homes | U/C thread but what we get now are people who want the sanitized comments about whatever is least offensive and sure not to spark real debate. It was fun while it lasted. Hopefully we will see some balance correction here soon. There could once again be some balance in the comments coming forward. Not just what some administrator thinks is valuable at the expense of thought provoking alternative points of view. There is not a lot of risk in allowing contributers to ask pertinent questions about this project and its' principles.

#4 Guest_Marcat_*

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Posted 05 May 2010 - 04:42 PM

I guess it's just a bit too much for some posters and administrators of this site to keep an open dialogue about this project, both pros and cons in the literal and metaphoric sense. It used to be quite stimulating and challenging back in the earlier days of the [Langford + Highlands] Bear Mountain | 5,000 homes | U/C thread but what we get now are people who want the sanitized comments about whatever is least offensive and sure not to spark real debate. It was fun while it lasted. Hopefully we will see some balance correction here soon. There could once again be some balance in the comments coming forward. Not just what some administrator thinks is valuable at the expense of thought provoking alternative points of view. There is not a lot of risk in allowing contributers to ask pertinent questions about this project and its' principles.


I couldn't agree more with you on that.

#5 spanky123

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Posted 05 May 2010 - 05:54 PM

I don't have any issues removing slanderous posts. Hopefully now that there is a dedicated thread for this discussion the intelligent debate can continue.

I didn't comment in the other thread regarding Mysage's suggestion that Barrie was simply a "sly fox" planning to scoop everything back from creditors at pennies on the dollar. Frankly I have seen this happen a lot in my time. There are lots of "sly foxes" out there who use the court protection process to cheat their investors and suppliers out of money.

This case is different though. The court has replaced BM's management team and directors. A CRO has been appointment to run BM and Barrie has no further involvement in the company. If Barrie wants to scoop BM back then he will need to raise some money (perhaps more hockey players out there) and submit an offer to the court and the monitor. In other instances management remains intact and simply uses the court process to exit out of unfavourable contracts and agreements and negotiate better terms on debt.

I don't see that happening though. Aside from the question of whether or not Barrie actually has any money, HSBC is setting themselves up to be the ultimate owner by providing the DIP financing. If someone came along and offered the monitor/court $300M then I am sure that they would take it, but a fire sale it won't be.

It would be interesting to know to what extent people are just "trolling" or if they actually believe that somehow Barrie will get everything back and things will return to normal if they just hold on a little longer. Ian Thow tried that with his investors and it didn't work.

#6 Zoe

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Posted 06 May 2010 - 12:13 AM

The Bear Mountain insolvency page at PWC has several updates:
- Court order for CareVest
- Court order for Romspen
- Claims process for creditors

I don't see anything new except the lawyers list growing longer.

http://www.pwc.com/c...ain/index.jhtml

#7 Zoe

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Posted 06 May 2010 - 02:05 AM

There's a mess of new lawsuits naming Bear Mountain this week.

E.H. EMERY ELECTRIC LTD. v BARRIE, Len
Supreme Civil (General)
Victoria Law Courts
29 Apr 2010

COMPASS CONSTRUCTION SERVICES LTD v BEAR MOUNTAIN DEVELOPMENT HOLDINGS LTD
Supreme Civil (General)
Victoria Law Courts
05 May 2010

WEST BAY MECHANICAL LTD v BEAR MOUNTAIN MASTER PARTNERSHIP
Supreme Civil (General)
Victoria Law Courts
30 Apr 2010

COASTAL PAINTING LTD. v BEAR MOUNTAIN DEVELOPMENT HOLDINGS LTD.
Supreme Civil (General)
Victoria Law Courts
04 May 2010

LING, Pearl v BEAR MOUNTAIN GOLF & COUNTRY CLUB LTD.
Supreme Civil (General)
Victoria Law Courts
03 May 2010

#8 aastra

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Posted 07 May 2010 - 04:02 PM

The main thread is locked? What did I miss?

All I wanted to do was post a link to this picture:
http://www.flickr.co...erc/4183180736/

#9 gumgum

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Posted 07 May 2010 - 04:28 PM

I suppose g-man froze it for a couple of days.

#10 Zoe

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Posted 11 May 2010 - 05:09 PM

More new legal action: Phil Leedham, the (former?) Chief Operating Officer for Bear Mountain Resort, versus Bear Mountain.

LEEDHAM, Philip v BEAR MOUNTAIN MASTER PARTNERSHIP
Supreme Civil (General)
Vancouver Law Courts
11 May 2010

Phil Leedham was HSBC’s senior manager of commercial banking while the deal with Bear Mountain was being put together. (link)

#11 spanky123

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Posted 11 May 2010 - 05:48 PM

Perhaps Phil believes that he was wrongfully dismissed!

You have to wonder the point of all of the legal action after the fact. Word is that preferred and unsecured creditors are getting nothing so why throw good money after bad on legal fees?

What will be interesting to see is whether or not all of the creditors file claims. On the one hand there is always a hope that there may be some money at the end of the day, but on the other hand the claims will become public which means that all of your bankers and business partners will know how much money you are out!

#12 Zoe

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Posted 18 May 2010 - 12:45 PM

New lawsuit naming Ron Aitkens - probably the same Ron Aitkens who got busted in some real-estate wrongdoing in Alberta last year.

BEAR MOUNTAIN DEVELOPMENT HOLDINGS LTD. AS BARE TRUSTEE FOR BEAR MOUNTAIN MASTER PARTNERSHIP v AITKENS, Ronald
Supreme Civil (General)
Vancouver Law Courts 103276
10 May 2010

#13 Zoe

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Posted 18 May 2010 - 02:42 PM

More fascinating things to read. The first report from the Chief Restructuring Officer is now online here. (28 page pdf.) Some highlights:

- Bear Mountain Master Partnership has not paid the City of Langford $2.6 million in property taxes while it appeals its assessments. Property taxes are a prior charge on the land. (p. 13)

- Revenue Canada has completed its audit of the companies and levied assessments in excess of $3.5 million, some of which will probably be appealed. (p. 15)

- Bear Mountain Development Holdings, which is wholly owned by Len Barrie, has not updated its financial statements since February 2009, and the company's officers have told the CRO that those statements are not correct. Certain transfers of money from BMDH were not recorded, and others were misrepresented. The CRO is requesting more information from the officers. (p. 18)

- Expenses exceeded revenue by $2.1 million from March 25 to May 14, 2010. (p. 28)

- The CRO asks the court to assign the Bear Mountain companies into bankruptcy, while it continues with the CCAA process. (p. 20)

#14 spanky123

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Posted 19 May 2010 - 06:00 AM

The monitor's 3rd report has been delayed.

Won't be suprised to see bankruptcy proceedings commence.

No mention anywhere in the CRO report about the $9.xM owed to Langford for the interchange. I wonder if we have been told the whole story by the City.

#15 Zoe

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Posted 19 May 2010 - 10:08 AM

Hm. There is a mention of the interchange on page 3:

As part of its land development project, BMMP may be required to undertake various land service development projects, including paying for its share of the expected costs of construction of the Spencer Road Interchange and ... Bear Mountain Parkway. These costs are expected to be recovered as the remaining lands are developed. [emphasis mine]


Bear Mountain owes $4.79 million, 55% of the $9-million total. The rest is to be paid by the Skirt Mountain developers. What I'm hearing from Langford is that they didn't set a new payment date after the March 2, 2009 missed payment. The city may still be trying to get government grants to cover those costs. But -- as I pointed out to the federal ministers -- a privately-funded project is not eligible for government grants. That would amount to a cash gift to a private company, and it would violate provincial laws intended to prevent corruption and graft.

#16 spanky123

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Posted 19 May 2010 - 10:23 AM

Thanks Zoe,

I thought that I had read earlier this year in the Gazoo that Mayro Young was quoted as stating that the City had a charge over the properties by way of property tax assessment. If that had been the case then I would have expected to see it mentioned.

The fact that BM may have the repay the monies owed wasn't what I thought the arrangement was.

#17 Zoe

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Posted 19 May 2010 - 11:18 AM

You're absolutely right, Spanky. But I'm skeptical of anything printed in the Gazoo, and doubly so if it's attributed to the mayor. I believe the city is still trying to get the province or the federal government to pay Bear Mountain's share, since you can't get blood from a stone.

I'm only sure of two things at this point - so I appreciate the dialogue. :)

1) Langford is not on the list of secured creditors.

2) There is no set date for repayment of the interchange loan.

Here's an excerpt from the repayment agreement, which was passed as part bylaw 1171 in August, 2008. (Note that LGB9 is now BM Development Holding.) I will go through the report again and see if I can find any mention of "charges" on the property. But maybe that's in a separate document?

Staff report to council, August 18, 2008:

1. In this Agreement,
(a) "Local Area Service Petition" means the petition for the Spencer Road Interchange Project, the sufficiency and validity of which was certified by the City's Corporate Officer on December 27, 2007,
(B) "Payment Date' means March 2, 2009 or such other date as may be mutually agreed to by LGB9 and the City, and
© "Project" means the Spencer Road interchange project and defined as the "Project' in the Spencer Road Interchange Construction Management Agreement entered into concurrently by LGB9 and the City.

Payment Obligations
2. LGB9 shall pay to the City in respect of each of the parcels shown in column 2 of Schedule A the amount shown for that parcel in column 3 of Schedule A.

Timing of Payment
3. LGB9 shall pay to the City the amount required under section 2 of this Agreement on the Payment Date.

Form of Payment
4. Payments required to be made to the City under this Agreement shall be made by LGB9 providing to the City on the Payment Date the following:
(a) cash in the amount required under section 2; or
(B) a clean, irrevocable letter of credit in the amount required under section 2,
(i) that is issued by a Canadian Chartered Bank or Credit Union having a branch office in the City of Langford,
(ii) that has a term of at least 1 year, and
(iii) that is in a form acceptable to the City's Director of Finance.

Schedule A
Column I Column 2 Column 3
Owner Parcel Required Payment
LGB9 Development Corporation 009-853-081 $148,335.80
LGB9 Development Corporation 009-853-103 $192,247.49
LGB9 Development Corporation 009-858-636 $342,725.33
LGB9 Development Corporation 009-858-652 $2,085,269.40
LGB9 Development Corporation 026-228-203 $84,074.81
LGB9 Development Corporation 026-228-211 $129,057.51
LGB9 Development Corporation 026-632-209 $129,593.01
LGB9 Development Corporation 026-886-472 $41,234.14
LGB9 Development Corporation 027-055-680 $115,134.29
LGB9 Development Corporation 026-952-076 $73,364.64
LGB9 Development Corporation 025-838-563 $1,097,256.55
LGB9 Development Corporation 026-867-494 $29,988.47
LGB9 Development Corporation 025-695-126 $328,802.11
Total $4,797,083.54



#18 spanky123

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Posted 19 May 2010 - 03:59 PM

Monitor reports today that they expect HSBC to be petitioning BM into bankruptcy shortly. PWC also reports that the Province has commenced a PST audit and that the City of Langford will be owed another $2.1M in property taxes (that BM doesn't have) next month.

#19 Lorenzo

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Posted 19 May 2010 - 06:09 PM

I may be wrong here, but isn't Langford Council about to borrow a whack of cash to cover "future anticipated revenues?"

Is the interchange debt, and now the owed BM tax bill part of those "anticipated revenues?

Will we now be paying interest on a loan for those anticipated revenues that may never materialize?

This is all makng my head hurt. :confused:

#20 manuel

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Posted 19 May 2010 - 09:41 PM

Lorenzo, don't worry. If my memory serves me, Langford had accounted for fed or prov funds for the bridge as revenue in its books. Would be quite the hit for it now to be debt with no forseeable revenue.
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