The B.C. Supreme Court has approved a plan to sell the financially troubled Falls Golf Resort and all its assets to Vancouver-based Pinnacle International Lands Inc.
The plan approved last Friday sets out a timeline for the proposed transaction, including a meeting date for creditors, before completion of the sale to Pinnacle on or before Nov. 30.
A Pricewaterhouse-Coopers monitor, appointed by the court when Blackburn Developments president Rick Wellsby applied for bankruptcy protection in early February, selected Pinnacle’s $15-million bid as the “most favourable” offer because it included both the golf course and surrounding development lands and “will provide the highest return to all creditors.”
The PwC monitor also recommended the court direct Wellsby and other Blackburn principals to “immediately cease any further efforts to identify an alternative restructuring plan.”
Wellsby had hoped to put together his own restructuring plan for court approval.
He declined comment Tuesday on the court’s decision until more details of the impact of the proposed sale become clear.
“All I can say about the Pinnacle deal for now is that they are the chosen bidder by the monitor, and we will see what takes place over the next six to eight weeks,” he said in an email to The Progress.
A Pinnacle official did not return a request for an interview about the company’s plans, if the sale is completed.
About 40 to 50 residents who bought properties developed by Blackburn near the golf course are not involved in the bankruptcy proceedings, but some may have made claims as investors in the company.
However, the financial health of the hillside golf resort would have an obvious impact on their property values.
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, 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.
Pinnacle’s $15-million offer sets aside $2.85 million for Landau’s secured debt, $2 million for a mortgage registered against the golf course lands and a $10.5-million fund to pay bankruptcy fees, mortgagees and more than 100 unsecured creditors.
In an earlier interview, Wellsby said the company’s financial troubles began in March this year when a mortgage holder called in a loan, which sparked a “cash crisis” and his subsequent petition for court protection.
Earlier, in September, 2008, Wellsby had announced an ambitious plan to add a 940,000-square-foot sports facility to the golf resort that would house four ice rinks, an eight-sheet curling rink, and a multi-purpose indoor sports field. A 240-room hotel, a luxury spa, plus 90 “high-end” residential units and a 135-room dormitory for a youth sports camp were also included in the plan.
There have been several grandiose developments proposed in Chilliwack’s eastern hillsides over recent years, but, so far, only Wellsby’s 1989 vision of The Falls Golf Resort has become a reality.