The Falls Golf Resort located in Chilliwack’s eastern hillsides filed for bankruptcy protection in February.
But the court proceedings were extended into January this year after a proposed sale of the resort to Pinnacle International Lands Inc. was defeated by a “vulture fund” called Streetwise Capital Partners Inc.
In a Dec. 15 ruling, B.C. Supreme Court Justice Robert Sewell extended a stay of proceedings to Jan. 31 and suspended the authorization of a PricewaterhouseCooper monitor to pursue sale of the property “without further order of this court.”
The justice also directed the PWC monitor not to incur further costs “in relation to any restructuring transaction” prior to Jan. 5 without the consent of Streetwise and the Landus Development Group, the largest single creditor at The Falls.
The PWC monitor had argued against allowing Streetwise to vote using ballots it had obtained from creditors to defeat the Pinnacle bid, but the justice ruled in favor of Streetwise earlier in December.
In that ruling, Sewell found that Streetwise had not acted in “bad faith” as alleged by the PWC monitor, nor had Blackburn president Rick Wellsby intended to deceive creditors with misleading information contained in emails that urged 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.
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.
According to a monitor’s report, the “Landus Group” (consisting of Landus Development Group Inc. and Home Equity Development Inc.) is the single largest creditor with total claims exceeding $23 million.
Blackburn’s total debt had spiralled up to $64 million when it filed for bankruptcy protection, according to a monitor’s report, including $125,725 in taxes owed to the City of Chilliwack.
The PWC monitor, who has effectively controlled the resort’s operations since February, was tasked with ensuring the
company didn’t fall further into debt while a process for the sale was set up.
The 162-acre golf course opened in 1996 and included a pro-shop, a restaurant and banquet facilities. The 71 acres of surrounding development lands have been approved for a mix of commercial and residential uses.
In October, the City of Chilliwack reduced the number of homes in its development plan for the eastern hillsides to 1,700 from the 5,200 envisioned in 1994.