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Creditors agree to keep ski resort afloat



Financial management plan for Garibaldi Alpen gets 100 per cent approval

The creditors of Garibaldi Alpen, the proposed ski resort in Squamish, decided unanimously to accept the company’s latest financial plan to keep the development alive.

The 100 per cent approval surprised Stephen Ross, lawyer for the company, who was at the creditor’s meeting in downtown Vancouver on Friday, June 21.

"I’ve never heard of that," he said.

"There’s usually a few creditors that don’t like the plan."

The approved financial management plan addressed the issue of paying back roughly $5.5 million to the company’s 172 creditors.

Small creditors, those owed less than $5,000, will be paid within 90 days.

There are 65 who are owed less than $1,000 and 92 who are owed less than $5,000.

Large creditors, on the other hand, will have preferred shares in the company, which can be redeemed after the master plan for the development is approved.

That master plan is not due to be handed in to Land and Water B.C. until April 15, 2003.

"I’m pleased," said Wolfgang Richter, the main proponent of the project.

"It was an honourable settlement which will give everybody a dollar for dollar pay out sooner or later and as soon as possible."

Ross said there were two unique circumstances in this situation that may account for the unanimous approval.

It was clear that if the 30 to 40 creditors who attended the meeting defeated the proposal they would most likely not recoup any of their investments.

The second unique aspect, which may have shifted tide, was that the plan offered all creditors, even the unsecured creditors, 100 per cent of their claim.

He said this was an unusual deal.

"When you’re a creditor in a position where you vote against it you’ll probably get nothing or you vote for it and you may get everything, it makes it pretty easy to vote," said Ross.

Despite the positive outcome of the creditors meeting, Richter sounded pleased but weary.

"It’s a very formal process and it sort of felt a little bit like a wedding," he said.

"I mean, sort of joyous but very somber and serious at the same time."

His company was in dire straits after the previous financial backers pulled out about two years ago.

But a Toronto-based financier, Milborne Development Corp, came to the rescue in February, pledging $5 million investment over the next two years. Two Vancouver companies, Ledcor Construction Ltd. and Pelorus Development Corp., also became involved.

With the new financial backing Lands and Water B.C. gave Richter one final extension to complete environmental studies and socio-economic studies for the proposed resort, providing a plan to clear up previous debts was approved.

This financial support was invaluable when it came time for Garibaldi Alpen to submit its list of creditors to the courts in May.

At the end of that month a B.C. Supreme Court Chief Justice gave them the go ahead to present their creditors, which include trade creditors, crown creditors, employees and lenders, with a plan.

"By approving it (the creditors) gave the project new life," said Richter.

With the constraints of the debt load behind him, he can now turn to completing the environmental and socio-economic assessment project report by Feb. 28, 2003, and the master plan by April 15, 2003.

"It’s very important that we use the momentum now that we’ve been able to create," he said.

Most of the summertime will now be spent on the mountain where he one day sees 150 ski runs and a village with up to 1,500 hotel rooms.

Richter said: "It’s good news for the community and it’s good news for the region."