Casino players still deadlocked
A high stakes battle between shareholders of Casino by Vanshaw to relocate the gaming facility seems, for the time being at least, to have ended in a draw.
Court documents reveal this week that Vanshaw Enterprise’s new majority owner and its landlord, the Medicine Hat Lodge, itself a minority shareholder, are awaiting regulatory approval on a new seven-year lease.
That comes after years of legal wrangling between former majority owner and president, Kevin Van Der Kooy, and the Lodge.
An interim receivership action launched last fall by Lodge owner Mayfield Investments was ended on Wednesday. It certifies a new majority ownership group led by local businessman Albert Stark, and describes recent actions to stabilize the business.
A proposed lease, briefly described by the receiver, MNP Debt Services, also ends the question of where the casino would operate until at least 2025.
“It’s still a bit of a work in progress,” Stark told the News on Friday, declining further comment on the lease proposal that still requires Alberta Gaming and Liquor Commision approval.
“We’re handling day-to-day operations and dealing with some of the problems from the past.”
“As far as day-to-day operations are going, we’re out of receivership, and we’re running properly, as we’ve done for some time under the watch of the receiver.”
The interim receiver’s report in November 2017 found the casino could owe up to $10 million in debt and potential court judgments while not having enough cash to continue operating past the end of that month.
Chief among issues is a lease on another building in the south end, where the casino threatened to move during a standoff between former controlling partner Kevin Van Der Kooy and the lodge.
Stark argued in an affidavit in the same action that paying rent at the Southside Events Centre as well as the Lodge was untenable.
This week he said that he’s sought to activate a termination clause and payout to the local investors group that owns the meeting and convention space with an adjoining pub.
Last spring it was renovated by Van Der Kooy to house the casino before final AGLC approval of the move was obtained. An application made last June has seemingly not proceeded past the public feedback stage.
The building is currently listed for sale.
Stark’s affidavit also states he was not made aware of Vanshaw’s financial liabilities when a numbered company controlled by him and Cam Christianson, of the Canalta Hotel family, bought into the business last July.
Stark’s company claims it is owed $3.5 million in loans paid for both the outfitting of the Southside Events Centre and ongoing operations at the Lodge location.
An initial receivership report states that the potential liability to Vanshaw for breaking the lease two years early could be $2.2 million, not including a $600,000 judgment against Vanshaw for back rent.
A $380,000 overdraft at Alberta Treasury Branch was also detailed.
Another lawsuit: A local ATM operator claims $2.9 million in damages from an alleged breach of contract after exclusive rights to put cash machines at the casino was cancelled by Van Der Kooy and then resold.
In January 2017 a legal battle over what portion of the facility’s lounge and restaurant should be considered in the parties’ lease became public when the Lodge locked the doors citing back rent.
At that time Vanshaw president Van Der Kooy said he would relocate the casino.
Adding to the complexity, Box Springs Business Park officials told the city planners last fall that the park on the west end of town needed an extension because moving the casino there was taking longer than expected.
Court documents filed late in the year revealed that Van Der Kooy was in discussions with Stark in late 2016 about an eventual move to a permanent location in Box Springs, where Stark is an investor and Christianson operates a hotel and restaurant.
The two men agreed to provide Vanshaw a loan, but when more money was required last summer, they sought an equity stake in the company as assurance the move to Box Springs would proceed.
Stark did confirm that Van Der Kooy, who is currently barred by the AGLC from being involved in casino operations, remains a minor shareholder with the company.
Starks said more details on future plans for the business might be released this summer.