Chilliwack golf resort sale delayed

Two companies now bidding for land, tax assets of The Falls Golf Resort

A so-called “vulture fund” has swooped down on the The Falls Golf Resort in Chilliwack and kiboshed the bankruptcy plan approved last month by a BC Supreme Court Justice.

Streetwise Capital Partners has obtained enough creditors’ votes to defeat the proposal by Pinnacle Land Developments Inc. to buy the resort – over the objections of court-appointed monitor Pricewaterhouse Coopers.

Justice Robert Sewell said in his Wednesday reasons for rejecting the PWC application to dismiss the Streetwise vote, that he is urging the two bidders to come to an agreement.

“I am therefore prepared to hear an application to extend the stay (of court proceedings) beyond December 15, if the parties see any utility in so doing.”

In September, Sewell had approved Pinnacle’s $15-million bid to buy the hillside resort, giving creditors until Nov. 30 to accept or reject the offer.

But Streetwise, a self-described “vulture fund” that Sewell said “specializes in realizing value from financially distressed enterprises” obtained enough creditors’ votes to defeat the Pinnacle plan.

“The principal difference between the Pinnacle and Streetwise proposals was that the Pinnacle proposal called for (resort operator Blackburn Developments Inc.) to retain its real estate holdings and provided sufficient capital to satisfy senior secured holdings,” Sewell said, “while the Streetwise proposal called for a disposition of those real estate assets, except for the golf course.”

Sewell did not find that Streetwise had acted in “bad faith” as alleged by the PWC monitor, nor did Blackburn president Rick Wellsby intend to deceive creditors with misleading information contained in emails urging them to support the Streetwise offer.

“I accept his evidence that he genuinely believed that the Streetwise proposal offered the best recovery to creditors and that he continued to hold that belief after I approved the Pinnacle (restructuring plan),” Sewell  said.