Tuesday, December 02, 2008

HVRC to file for bankruptcy

The end of Humber Valley Resort (as we know it today) ...

With sadness I have to blog that today Humber Valley Resort Corporation (HVRC) announced that it is to file for bankruptcy. See below for their announcement email.

We can only hope that when everyone including creditors, owners and the local community (& its economy) have got through the next stages of the ongoing process ... what's left of the resort and everyone directly and indirectly involved with it, can grow into that vision and belief that we all had, and mostly still have.

We all share the passion of, & belief in, Western Newfoundland & its people. In fact We're Crazy About Newfoundland.com ... Are you?




Announcement email from Newfound NV:

December 2nd, 2008
Humber Valley Resort Corporation


Dear Owner,
You may recall from our presentation and earlier correspondence that, during the time Newfound has been financing the CCAA process, we also formulated a draft preliminary plan of arrangement that, in our view, gave the interested parties i.e. the creditors and the chalet owners the best result in the unhappy circumstances that Humber Valley Resort Corporation found itself in.


The plan that we had put forward asked the Government of Newfoundland to support it in 3 areas, namely;

* To assist in bringing flights into Newfoundland from the UK

* To work with the local Municipality in their takeover of running essential services on the resort

* Transferring into freehold, the amount of leasehold land that HVRC had already paid leasehold fees on, so that financing of new development could take place enabling the creditors to participate in the resultant profits.

It was not feasible to submit our proposed plan to the Court for approval, or to the creditors and chalet owners to vote on, unless we had some indication of support from the Government, in writing, to it. Conditional support would have been acceptable. The Government have had our proposal for consideration since 16 October. Whilst it is fair to say that we have had encouraging discussions, we have had no confirmation of the Government position, either verbally or in writing. Our initial requested deadline for a decision was 14 November. I was promised on Monday 24 November that, after the Cabinet meeting of 27 November I would be informed of the decision, either way, in writing. I explained during that conversation that we had run out of time as our CCAA protection was due to expire and if I could not submit the plan then I would have no choice other than to withdraw our proposal, which would mean imminent bankruptcy for HVRC. The alternative would be for Newfound to risk a great deal more money as a creditor to HVRC and I do not have Board authority to do so. I was very careful to stress to the Government on Monday 24 November, that I wanted to and was able to continue, but was clear that close of business on Friday 28 November was our absolute deadline for a Government reply. This was, sadly, not forthcoming. I understand, from a third party, that the proposition was discussed as cabinet but there was no resolution. Despite our best efforts, there is nothing further we can do. I am deeply disappointed, as I still believe our ideas were the best possible result in the circumstances.

In these circumstances, I am afraid that we join you all as another creditor, and confirm that HVRC will have to file an Assignment in Bankruptcy, and that bankruptcy is now imminent. I am so sorry not to bring you better news. Should you have any questions, you may, with immediate effect, address them to Mat Harris and his team at Ernst and Young. Derrick White will no longer be in a position to formally help you.

Yours sincerely,
Jayne McGivern
CEO Newfound NV

3 comments:

Canada KDG said...

I'm disappointed for the local people and the local economy - as much as for owners and other creditors who have all to differing levels shared the passion and belief in the opportunities of tourism in Western Newfoundland. It's a shame that poor resort management, it's inadequate parent company(ies), lack of provincial government support to the development of tourism, and (to a degree), the lack of understanding of the opportunities ahead by some local people, have resulted in the current situation.

That said - I believe the majority of the owners still believe in the region - and for sure we all want it [the region] to succeed. It's going to be a tough period as we try to sort out the issues that the HVRC declared bankruptcy will cause. However hopefully in the longer term the regional tourism economy will develop and be seen as a benefit ... and then, (perhaps only then) the Humber Valley "ex-Resort" development will show its real value to the local community, and its government officials.

Gary Kelly said...

Dan,

Truly disappointing. Good luck to you and all the other stakeholders at the resort.

As I have maintained from the very beginning, the resort is good for the Humber Valley, Corner Brook and Western Newfoundland.

I wish you all the best and every success.

Hopefully a company with vision will be able to step in and develop the resort to it's full potential.

GK

Mike Madigan said...

Hi folks! Mike Madigan of the Sharecroppers Trio here! Disappointing to say the least! We really enjoyed singing & entertaining at Sully's over the years for you all!! We miss that!Good luck to you all. Hopefully some good news will come to play in 2009.
Take care,Mike Madigan (mike_madigan@yahoo.com)
www.thesharecroppers.net
(be sure to say hello)
P.S. Excellent site and info you have here since 2005. Wow! What history! Thanks for using our music on some of the videos!!