Garibaldi Alpen looks for ways to satisfy its creditors
The future of the Garibaldi Alpen ski resort in Squamish now lies in the hands of its many creditors who are owed roughly $5.5 million collectively.
They will decide on June 21, at a creditor's meeting in Vancouver, if they are happy with the proposed management plan to satisfy their claims.
The plan will provide payment to the small creditors (those under $5,000) within 90 days.
Large creditors will be offered preferred shares, which can be redeemed over a period of time.
Of the total 172 creditors, there are 65 who are owed less than $1,000 and 92 who are owed less than $5,000.
"It's not all debt," said Wolfgang Richter, whose ski resort dream for the slopes above Brohm Ridge dates back almost 25 years when he first stepped on the mountain.
"There's an awful lot of capital that's been invested."
A majority of the creditors must approve the plan and that majority must have at least two-thirds of the total debt.
This meeting is in keeping with last year's provincial requirement to get a creditor management plan in place.
"From my perspective (the debt) was significant enough to be sure that it was addressed," said Charles Littledale, regional manager of Land and Water B.C.
A list of the creditors, which include trade creditors, crown creditors, employees and lenders among others, was submitted to the courts last month.
On Friday, May 31 Supreme Court of B.C. Chief Justice Donald Brenner gave the company the go ahead to present the creditors with a plan.
"Now it's a matter of getting down to the nitty-gritty and getting all the creditors on side with the plan," said Richter.
Looking back, Richter, who is the chair and CEO of Garibaldi Alpen Resorts Ltd., said the company began ballooning into debt in late 1998.
"I think it was probably the Asian flu in mid-1998 that was a bit of an economic shock," he said.
Garibaldi Alpen, which still has to satisfy the province its plans for the resort are environmentally and economically viable, was given several extensions from Land and Water B.C. when the previous financial backers pulled out nearly two years ago.
"On the one hand it's a very speculative process so the money is categorized as risk money that limits it to the kind of people you can get that capital from because there's very little security even though there's a lot of confidence," said Richter.
"On the other hand, it's a matter of finding the right partners and the right circumstances so we're all cooking the same meal."
In February, Richter announced that a Toronto-based financier, Milborne Development Corp., would be investing $5 million over the next two years to complete studies.
In addition, two Vancouver companies, Ledcor Construction Ltd. and Pelorus Development Corp., became involved with the project at that time. Land and Water B.C. then granted Garibaldi Alpen a final extension.
The most immediate goal now is to get the creditors on board, a process Richter is hoping to get resolved by the end of June, so they can proceed with the rest of the studies.
"Basically it's in the creditors hands," he said.
While the small creditors will be paid within 90 days, the large creditors will not see anything until after the master development plan is signed with the province.
"If the development does not proceed then I don't see how the large creditors are going to get paid," said Stephen Ross, lawyer for the company.
"(But) that's hypothetical."
At the same time as the company submitted the creditor management plan to the government, it also provided them with a project completion plan, a project management plan and assurances there was funding for the project.
This was handed in to Land and Water B.C. (then B.C. Assets and Land Corp.) in December.
Despite the obstacles, Richter's 25-year dream of 150 ski runs, with 1,000 metres of vertical drop is still alive.
Eventually he sees a village with up to 1,500 hotel rooms and 500 single-family lots.
If the creditor management plan is approved, Garibaldi Alpen will then proceed to complete an environmental assessment project report by Feb. 28, 2003 and a master plan by April 15, 2003.
The master plan must meet the standards of the province's Commercial Alpine Ski Policy. The environmental assessment review includes consultation with local, provincial and federal government agencies, First Nations and local and regional stakeholders.
Until the creditors give the go ahead, those developments are essentially on hold.
"It's just hard right now because we'd rather be on the hill planning and getting stuff done," said Richter, who feels confident there will be approval to proceed at the end of the month.
The creditors meeting is set to take place on Friday, June 21. Creditors will be given a notice in the mail.