Employees to own developer
Calgary Court of Queen’s Bench has approved an extension of Medican’s protection under the Companies’ Creditors Arrangement Act (CCAA) to Sept. 30.
The extension is to allow RMS Richter — the courtappointed monitor of the Medicine Hat-based land developer and general contractor — and the company’s chief restructuring officer Tyrone Schneider time to develop a successor company and con- clude negotiations with respect to outstanding claims.
Medican entered CCAA protection in May 2010. At the time, the company owed in excess of $120 million to financial institutions and other financiers.
It owed more than $25 million to tradespeople and vendors, as well as $35 million in unsecured loans.
In the intervening 18 months, Schneider says he and the monitor have been working at ensuring all stakeholders are being dealt with fairly.
Court heard that Medican has repaid $87 million to secured creditors since it entered CCAA protection through the sale and liquidation of assets.
Medican plans to canvas its remaining creditors and stakeholders and return to court Sept. 30 with a formal plan based on the feedback it receives.
Separate plans of arrangement will be filed for the Calgary-based Sanderson Ridge development and the Kelowna-based Kaleido project.
Schneider says the restructuring plan will be to create a successor company that is owned by employees.
“We’ve got positive cash flow now,” says Schneider.
“We’ve paid off our DIP (debtor in possession) loan and we’re in the process of finalizing payments to creditors. What will emerge is a new employee-owned company.”
The new consolidated plan, says Schneider, will provide for a fund of no less than $10 million, which will be available for distribution to creditors during the next three years once the company has emerged from CCAA protection.
Sanderson Ridge is a project by Medican in Calgary.