Em­ploy­ees to own de­vel­oper

Calgary Herald - Calgary Herald New Condos - - New Condos - MARTY HOPE

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.

Cal­gary Her­ald Archive

San­der­son Ridge is a pro­ject by Med­i­can in Cal­gary.

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