The B.C. Supreme Court will hear a petition this month asking for a receiver-manager to oversee the Bear Mountain resort community where two owners are in a dispute that could affect how its golf courses are operated and how its land is developed.
Two days are set aside for the hearing in 91原创: June 24 and 25.
Sanovest Holdings Ltd. and 599315 B.C. Ltd., headed by chief executive Dan Matthews, are equal partners in Ecoasis Developments LLP, which was formed in 2013 under the company name Ecoasis Bear Mountain Developments Ltd.
The 886 acres of land was bought out of bankruptcy from a bank, HSBC, which had taken over from original developer Len Barrie and his partners.
Sanovest, which holds a $62-million loan on the Bear Mountain lands in Langford and the Highlands, asked the B.C. Supreme Court to appoint a receiver after Ecoasis Developments LLP failed to pay off the loan in full by May 1.
Sanovest claims there is a breakdown in trust between the two controlling partners — Sanovest director Tian Kusumoto and Matthews, chief executive of Ecoasis Bear Mountain Developments.
Ecoasis owns and operates the resort community’s two Jack Nicklaus-designed golf courses and tennis facilities and oversees hundreds of acres of undeveloped land on Bear Mountain.
Sanovest is asking for a receivership to preserve its assets and ensure fair treatment among creditors. Ecoasis and 14 other associated companies known as the Developments Partnership are listed as respondents in the petition by Sanovest.
The two partners have been at odds on many issues, including how to market and develop the remaining lands and on whether to sign a contract extension with the privately held Bear Mountain Westin Hotel for use of the locker-rooms, pro shop and cart-charging facilities linked to the two 18-hole golf courses.
Sanovest said it requires a receiver-manager to address several concerns, including property taxes coming due, looming legal expenses and potential payroll shortfalls.
Kusumoto said in his petition to the court that the lease with the hotel expires on June 30 and the partnership will require alternate arrangements for golfers if a new contract isn’t signed.
Ecoasis sold the hotel in June 2019 to a private company and entered into a lease agreement for the pro shop and cart storage.
“Without this [new] lease, the resort partnership will lose access to the [golf] course facilities, which would be very detrimental to revenue,” said Kusumoto in his statements to the court.
Golf carts are critical to the golf course operations since the length and hilly terrain would deter guests from golfing without carts, he said.
“The resort partnership will also require alternate arrangements for space for members and a pro shop.”
Kusumoto claims a representative of the hotel advised him the hotel would agree to commercially reasonable terms for an extension, but that “they would not extend or renegotiate the lease if Mr. Matthews is involved.”
Kusumoto said Ecoasis, at Matthews’ direction, skirted the hotel-contract issue and hired a contractor to build new cart-charging and storage facilities using shipping containers at an estimated cost of $500,000.
The new facilities are being built on driving-range land and required new cart paths. Kusumoto did not agree to the plan.
Sanovest claims it hasn’t received any audited financial statements since the end of 2018 from the development partnerships and will be unable to meet the bills as they come due, including $542,000 for accounting and legal services, a $300,000 default payment to the City of Langford for the Bear Mountain Parkway roadwork and $2 million owing vendors and other creditors.
Property taxes on Bear Mountain lands for 2024 are $1.6 million and due in early July.
Sanovest said legal claims against Ecoasis are mounting — $1.8 million by Langford for the parkway roadwork and $3.6 million by two developers claiming breaches of agreements.
Ecoasis applied to B.C. Supreme Court on May 10 to appoint a marketing agent and to approve the sale of about 10% of its land holdings at Bear Mountain — the proceeds of which would “fully retire the debt associated with Bear Mountain.”
Matthews alleges Kusumoto’s actions are threatening the “operational integrity” of Bear Mountain.
In the latest filing, Matthews said selling some Bear Mountain land parcels would generate funds to retire the loan, pay property taxes and meet other mounting expenses related to the development.
He said in a statement the Ecoasis court filings are in response to Sanovest’s refusal to approve significant land sales that would have resulted in $164 million in revenue, allowing the company to resume selling property and pay its bills.
Sanovest said in its court filing that while both sides agree Bear Mountain has significant value in the lands it owns, they “disagree on the appropriate strategy to realize on that value.”
Sanovest does not agree with Matthews’ application to subdivide, bundle and sell properties. It is seeking the receivership order to conduct a more transparent process, the court filing said.
Kusumoto said there are “irreconcilable differences” regarding the business.
“I have frequently sought to have the partnerships engage professionals to assess how they can proceed with the development of the site to maximize profitability,” Kusumoto said in his petition. “The partnerships have not completed this analysis and Mr. Matthews has advised me that he would prefer the sale of lots and bulk sale sites that would generate immediate profits. I have not agreed to those sales … without complete analysis, I believe the partnerships may have unrealized profits and/or be left with properties that are difficult to sell or develop.”
Kusumoto cites “management concerns” that he claims require a court-appointed receiver. Among the claims in the petition are alleged fees paid to Matthews without a formal agreement, the use of cash and questions about expenses charged to corporate credit cards.
The Sanovest petition said it is prepared to advance further funds for the receivership process — and operating shortfalls — but only if the court makes the receivership order.
