HVR never profitable, parent company says

Humber Valley Resort Corp. on Newfoundland's west coast will begin selling off its assets to pay creditors after falling into bankruptcy, its parent company said this week.

The failed high-end resort near Pasadena had been publicly struggling for months with its finances, after laying off 40 workers in August, but its parent company, British-based Newfound NV, said the resort's troubles began the day it opened.

"Newfound is the biggest fiscal creditor of Humber Valley resort corporation," said Newfound NV CEO Jayne McGivern. "We are owed over $46 million because Newfound has been propping up the resort since it began. Newfound has never made a dollar's profit out of Humber Valley Resort Corporation."

The destination resort and golf course sold luxury chalets to foreign customers, offering charter flights from Europe to nearby Deer Lake airport.

McGivern told CBC News the resort lost close to $1 million a year on just the flights alone.
She said by the time Newfound NV took over the resort, it was too late.

"We arrived here in July and we came to the conclusion by September that A, Humber Valley resort corporation was not viable and B, was unlikely to return the monies we've invested in it."
The company had filed for bankruptcy protection in September in efforts to save the resort. However, last week Newfound NV sent a letter, signed by McGivern, to chalet owners advising them that the company would not reapply for bankruptcy protection.

The company had been attempting to restructure itself through Newfoundland Supreme Court-granted protection. In the letter, McGivern said the company can no longer wait for answers from the Newfoundland and Labrador government for assistance on issues such as arranging flights from the United Kingdom to help the company's European clientele.

McGivern told chalet owners that, after weeks of talks with government, she informed officials on Nov. 24 that last Friday was "our absolute deadline" for a reply.

"This was, sadly, not forthcoming," she wrote.

Not only did the overseas flights send the resort into the red, the clubhouse, golf course and restaurant never made any money either, according to McGivern.

The resort owes thousands to contractors and building supply companies, on top of the $46 million it owes Newfound NV.

Web article based on radio interview on CBC 16th Dec 08