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#1 Mike K.

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Posted 21 November 2013 - 09:44 AM

In an effort to split the discussion on League and the company's financial situation from the discussion on League's Capital City Centre project, we have created this thread.

 

To participate in this thread we ask that everyone refer to only factual information as published by reliable media sources or parties involved in the financial restructuring proceedings (BCSC, PWhC, etc.). Any off-topic debate, hearsay, innuendo or otherwise defamatory content will be moderated by forum staff.


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#2 Sparky

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Posted 22 November 2013 - 08:24 PM

Founders of property firm League, developer of Colwood project, forced out

 

League group of companies founders Adam Gant and Emanuel Arruda were removed from their positions by court order Friday as part of a compromise reached between League, [...]

 

http://www.timescolo...ed-out-1.707309



#3 Sparky

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Posted 22 November 2013 - 08:49 PM

I am quoting the Times Colonist here for those of you that don't get it for free.

 

[...]

 

League group of companies founders Adam Gant and Emanuel Arruda were removed from their positions by court order Friday as part of a compromise reached between League, its secured creditors and investors that will see the company continue through a restructuring process.

Gant, the chief executive, and co-founder Arruda were replaced by League chief financial officer John Parkinson, who will act as interim CEO. Parkinson has also been charged with finding a replacement CEO over the next two months.

In an interview, Gant wouldn’t talk about leaving the company he founded, but admitted parts of the restructuring process under the Companies’ Creditors Arrangement Act have been “very emotional and trying.”

“I said at the start that nothing was sacred, we just want to make sure we get the best value out of this for investors,” said Gant, who will remain as a consultant through the creditors act process and remains as chairman of League Assets Corp.

Parkinson said the court’s approval of the compromise solution establishes a solid platform for the next phase of League’s restructuring. The company was initially granted protection Oct. 18.

“It allows us to move forward in the right way. What we are keen to do is maximize the value for investors and I’m comfortable this process allows us to do that,” Parkinson said. He noted they have the flexibility of choosing which assets to sell and when to sell them, rather than having to put them on the market “on a fire sale basis.”

The process that was approved by the court on Friday extends creditor protection until June 28, and approves $10 million in debtor-in-possession financing to allow day-to-day operations until then.

The deal was hatched between League, the majority of its secured creditors and the representative counsel acting on behalf of investors as an alternative to what was expected to be expensive and distracting litigation and a possible receivership process.

The order expands monitor PricewaterhouseCoopers’ role to include overseeing a new CEO, taking possession of all money owed to League group and its bank accounts, overseeing all payments over $5,000, reviewing and investigating the books and conducting a review of the 65 League entities not involved in the creditors act process.

The process will establish an orderly sale of assets, maintain League’s ability to put forward a restructuring transaction and gives League breathing room with respect to the Capital City Centre project in Colwood.

Gant said League now has six months to find a way to get the Colwood Corners project started again after the site was idled in July due to lack of construction financing. He hopes they can find a development partner or a means of refinancing the project to at least finish the first phase of what was to be a $1 billion build-out.

“Our goal is to figure out the best way to get construction going and ensure the maximum financial value,” Gant said, noting they have six months before any of secured lenders can act to realize their security on the property.

According to the monitor’s report, the breathing room was granted because the estimated value of the property in a sale would be less than the amount owed to secured creditors of the property.

The court also approved the sale of League’s holdings in Partners REIT. That sale to McCowan and Associates Ltd. for $27.1 million will pay $17.4 million to Firm Capital and nearly $10 million to Timbercreek which holds a security tied to those holdings of $13.5 million.

Following a heavy court schedule this week and what has been, at times, an acrimonious relationship with lenders, Parkinson said he was a little surprised. “I don’t think we anticipated we would have such a strong reaction from our secured lenders,” he said. “We have been working hard with the various lenders to get to this compromise position and, frankly, I thought we would get here more easily and in a quicker manner.

“It’s been a bit of a fight and that for me has been a bit of a disappointment in that it has taken as much time and effort.”

Gant echoed that sentiment, noting the League group always believed secured lenders had plenty of security, and that League saw the creditors act process as a means to deal with the complex structure of the company and improve its debt position. “It was amazing to see the push back from lenders,”

   


#4 spanky123

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Posted 23 November 2013 - 07:08 AM

Hardly "forced out" when you still get to be chairman of the board, get hired back as a consultant and have your right hand guy as CEO!


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#5 Sparky

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Posted 23 November 2013 - 10:42 AM

^ Good point.



#6 jwreal

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Posted 23 November 2013 - 05:49 PM

In my opinion the whole League group will be in liquidation before the end of December. There is just nothing to be gained dragging this out. There is no value. There are no options. There are no angel investors coming out of the woods, taking large risks at a time when the banks are nervous about real estate and a potential bubble.

 

We have only seen the tip of the iceberg. There was a reason for the complicated legal structure of the different League projects. Questions will be asked. Cross loans will be examined. Appraisals will be taken apart. And for sure, real estate commissions for transactions will come under the magnifying glass.



#7 spanky123

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Posted 23 November 2013 - 07:20 PM

I really doubt that League can sell off all of their properties in an orderly manner and wind this down in 30 days. I think that it is far more likely that the stay of proceedings will be extended past June.



#8 Sparky

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Posted 26 November 2013 - 07:54 AM

Lot's of news coming out of Friday's PWC 6th report. Interesting to note that their head office on Redbrick is mortgaged to the tune of $9.5M but is only assessed at $5.9M.

 

Those of you that pay the ransom of a local paywall can read this until I can get you another source. The PWC report is too dry to read.



#9 jwreal

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Posted 27 November 2013 - 03:41 PM

Interesting to note that their head office on Redbrick is mortgaged to the tune of $9.5M but is only assessed at $5.9M.

 

Mahogany floor to ceiling, etched glass partitions between the offices, fireplaces in the offices, persian rugs .....  those offices are spectecular and very impressive.  Impressing people they were good at.


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#10 VicHockeyFan

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Posted 27 November 2013 - 03:54 PM

Lot's of news coming out of Friday's PWC 6th report. Interesting to note that their head office on Redbrick is mortgaged to the tune of $9.5M but is only assessed at $5.9M.

 

Those of you that pay the ransom of a local paywall can read this until I can get you another source. The PWC report is too dry to read.

 

Sparky, can you see how the Victoria Plaza project sits in all this?   


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#11 Sparky

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Posted 27 November 2013 - 04:11 PM

^ Let me have a look. That one has been a little on the down low for some reason. I will pull my magnifying glass out tonight.



#12 Sparky

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Posted 27 November 2013 - 05:57 PM

^^ League Capital Partners joined forces with GMC projects on this one. There is nothing mentioned about this particular property in the monitor's reports. We may never know the financial relationship between League and GMC, but one piece that I read (not a court document) suggested that they had only placed a deposit on the purchase of the property.

 

Not sure where this one will end up, but they do have CoV approval to develop the property in accordance with their proposal. That's a big hurdle to overcome in that neck of the woods.



#13 Mike K.

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Posted 27 November 2013 - 05:59 PM

GMC/Wessex Management are involved with Eagle Creek Village in View Royal. It could be a while before they move on the Plaza redevelopment.


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#14 VicHockeyFan

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Posted 27 November 2013 - 06:31 PM

We may never know the financial relationship between League and GMC, but one piece that I read (not a court document) suggested that they had only placed a deposit on the purchase of the property.

 

I keep hearing this too, that the deal never closed.   I ran a title search on the property, the title did not change, but on commercial property wholly owned by one entity (and that entity owns no other property unrelated), to avoid the transfer tax they often sell all the private shares of the company to one another.


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#15 Sparky

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Posted 27 November 2013 - 06:59 PM

It get's better than that. Click here and go to page 10. http://www.pwc.com/e...01_10182013.pdf

 

One of leagues subsidiaries paid a deposit of over $850 K to buy the property and the sale was to close on July 31 2013. Before the sale closed it was discovered that there was a gas line running down the back of the property but it did not have an easement. League asked the vendor to remove the gas line but the vendor said no. League took exception to that and did not close the sale and asked for the deposit back. The vendor said no.

 

There were property taxes paid out of the deposit, but I think to this day the vendor's lawyer still has $679K that they are probably holding on to.

 

Yikes.



#16 VicHockeyFan

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Posted 27 November 2013 - 07:10 PM

Right, and Second Lake Timber Company was the owner when I ran the title check, but I'm unclear when I did that, I'll need to check with the registry agent that did it for me.  I think it was before July 31/13.

 

...but in any event, it looks like it never closed, but the previous owner, or their lawyers, have $850k.


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#17 Sparky

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Posted 27 November 2013 - 07:17 PM

It would be a shame if that development approval was washed down the same drain that swallowed the $850k. Getting that approval is no easy task.

#18 spanky123

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Posted 27 November 2013 - 07:54 PM

Mahogany floor to ceiling, etched glass partitions between the offices, fireplaces in the offices, persian rugs .....  those offices are spectecular and very impressive.  Impressing people they were good at.

If I recall, the space was occupied by CUPE or one of the other unions before League purchased it. Many of the improvements were already there!



#19 jwreal

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Posted 28 November 2013 - 03:16 PM

If I recall, the space was occupied by CUPE or one of the other unions before League purchased it. Many of the improvements were already there!

 

Not a chance Spanky. Everything was hugely upgraded, completely over the top. Other Peoples Money was most generously spent. It is better than the old offices of Hertel on top of the  Apex Building. ... 



#20 spanky123

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Posted 28 November 2013 - 04:18 PM

Not a chance Spanky. Everything was hugely upgraded, completely over the top. Other Peoples Money was most generously spent. It is better than the old offices of Hertel on top of the  Apex Building. ... 

Just checked and it was the BC Ferries Marine Workers Union. Have you been to the BC ferries offices in the Atrium? That is taxpayer money and they are pretty swank.



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