Owners consortium bid to buy HVR assets ...

The following "bid news summary" is from the HVR bid consortium led by Mike Ward:

On Friday 6th March a bid was submitted by Mike Ward and his team of Owners at Humber Valley with a view to buying the resort assets and running a successful commercial business.

The plan recognises the problems of the previous management teams and misguided focus, and what is needed to turn the resort around. The previous failed business model of selling land at high prices clearly hasn't worked and any plan with this as the short term model will fail.

The resort needs to implement a successful operational model to bring in local people which in our view is absolutely key to the success of the resort. The golf course would be run by a professional golf course resort management team and would ensure that the green fees would not be at the previous high levels. The golf course is exceptional, won many awards, and we would want to ensure that local people benefit from this experience. We intend to encourage local golfers to play more on the course with special discounts for locals.

Many Owners felt the original HVR strategy was failed by the lack of a planned hotel operator for the resort in the early days. Many successful resorts around the world have the common theme of having a hotel at its centre, and it being the heartbeat to the resort. This would often include restaurants, fitness centre, swimming pool etc. This is key to the success of the resort and the team has already had positive meetings with a large professional chain and would expect to sign contracts with the group if successful with the bid.

When asked about building more properties on the expansion land Mike Ward explained that there were many properties on the original land that needed to be finished first, adding "Building more properties in the expansion land is clearly not a focus in the short term, however there are several plots of land on the edges of the development which have no access. Clearly something would have to be done to bring them services and accessibility"

Asked about the other bids on the table he preferred to focus on his bid which is clearly what is needed at the resort. A professional hotel chain, potentially with a conference centre and a golf course operator is needed to give people the experience so they want to come back again and again.

Asked about other people who have been involved in the failure of the resort coming back he said "Their credibility has been publicly ruined, and the history will make it hard for them to be trusted again. This would be a disaster and I'm not sure where it would lead - they should not be allowed to bid without an investigation into the historic dealings at the resort, sometimes you have to just look at the bigger picture and do what is best for the resort and the local community. This might mean withdrawing from the process and wishing another bid the best of success - it takes somebody who is magnanimous to do this".

The vast majority of the owners would like the owners-led bid to succeed. In our opinion the owners feel strongly that they were badly let down by the previous management teams at HVR and now want to take control of their own destiny. The previous management teams do not seem to be accepting responsibility for the bankruptcy of the resort, and the severe financial consequences for both the owners and trade creditors.

Asked about his motive to get involved he said "it's a case of having too. I have several properties and numerous plots of land. If this resort fails then everything I've spent the last 30 years working for is lost". When making a decision to bid it was not a difficult one because he is so passionate about the people and the area. Asked if he could see himself living in the area the answer was "yes that was always the long term plan. It just seems it might happen quicker than planned"

Extended CCAA Period for Humber Valley Resort Corp. HVRC

So Humber Valley Resort Corporation (HVRC) filed for the CCAA process on 5th Sept-08. They were back in court 6th Oct-08, along with key creditor representatives including the HVR Owners, Home Construction, Marine Contractors and Maxium Financial Services (golf equipment providers) ...

The resort was looking for extension through to 5th Dec-08 ... which with various caveats ... was granted. There was various debate about the salaries (and extra payments) made to staff that have retained their positions. The punchline being, they keep their pay and agreed extra payments.

Maxim were providers of golfing equipment to the resort, and had an amazing $900k of kit on resort, which they are trying to recover - to no effect as far as the Honourable Justice Robert Hall was concerned! They will have to wait like the rest of us!

The punchline of the session, though with several specific statements and actions, did actually give Humber Valley Resort Corporation (and the other HVR companies) an extension through to 5th December 2008.

Now the HVRC (the resort) needs to present their "plan" ... and get all creditors to accept it.

ALL the key players are in London on Wednesday 22nd and Dublin on 23rd for a presentation by the CCAA Monitor, Derrick White and Jayne McGiven ... (see you there?) ... of the plan and the future ... It would be fair to say the week ahead - is ULTRA IMPORTANT to the future of the resort!

More after the London meeting!

More news from HVR - No more golf? (for now)

Further news from Newfound NV, and Humber Valley Resort. The following letter is from Derrick White the President of Newfound Canada - sent midday 8th Sept. The big surprise is the mention of "winding down and closing" the golf operation, amongst other services. That said, the devil is (as always) in the detail.

It's all very sad - however if its part of a more co-ordinated plan, then it's hopefully a short term pain for a longer term gain for everyone involved including the local economy. Several of the people we've met in the last few days have commented that they wanted big changes for a number of years.

One of the key changes in our view is the need to enable new international routes through Deer Lake airport (& Stephenville if it can attract them!). And one last comment - on various other news services we keep hearing that Europeans want subsided flights to Newfoundland (it was even said on CBC radio1 by a Brit this morning!) - but it's not what's wanted. What we ALL want is simply international routes to be available and flown - not subsidised!

Then again of course to run a flight route requires guarantees - and that's where the provincial government can help. However the passengers are not wanting subsidies!



_______________________________


HUMBER VALLEY RESORT CORPORATION - CCAA Protection

It is with considerable regret, but with a determination to move forward, that we write this letter to you.As we are sure you are aware, an intensive review of HVRC, its liabilities both fiscal and legal, has taken place. During this process the company has consulted with outside advisors, the Government of Newfoundland and Labrador, and indeed, many of our owners.



The resultant analysis confirms our initial suspicion that HVRC is technically unviable and whilst historic contractual obligations remain, it will always have a liability that is impossible to remedy. Initial attempts to restructure to bring the overhead to a manageable level, met with considerable opposition, threats, implied and actual, of litigation and actually uncovered other breaches that had not been previously documented. The cost of resolution was far greater than the whole asset value of the company.



As per our press release of Friday, September 5, 2008, the company has sought and obtained protection from its creditors under the Companies’ Creditors Arrangement Act (CCAA). The CCAA is a Canadian federal Act that gives financially troubled corporations the opportunity to restructure their affairs through a formal plan of arrangement. This process was begun with a formal application to the Supreme Court of Newfoundland and Labrador where HVRC applied for protection under the CCAA. The court has issued an Order giving HVRC 30 days of protection from its creditors to allow for the preparation of the plan of arrangement. Once the plan has been prepared, the Company will update the market. We did not make this decision lightly. The alternative was to apply for full receivership, and to wind up HVRC. We did not feel that this was in anyone’s interests. Under the terms of the CCAA as previously described, we are able to submit to the court appointed monitor, a plan showing how we may move forward and finally deliver a sustainable resort that is financially stable, which we fully intend to do. Within this process, each of you will have a formal opportunity to submit any claims you feel that you may have to the court appointed Monitor. Ernst & Young Inc. have been appointed as our Monitor.



This action will result in immediate and tangible changes to the operation of the resort. In the coming days the resort will wind down and close the following onsite operations and services: the accommodations, food and beverage, activities and golf. Strawberry Hill will also be closing its rental pool and manor house operations. Flights from Gatwick to Deer Lake will continue as per the scheduled dates on September 11 and 18. The company is presently working hard, as are other local business organizations, all in consultation with the Government of Newfoundland and Labrador, to find a solution to continue the intended winter flight series. At this time we are unable to confirm whether the winter series flights will go ahead. Once a formal determination is made, we shall advise accordingly.



You will undoubtedly have many questions and we will do our best to address them over the coming days. We have formed a team of employees that will address your issues and concerns and each of you will be given a contact name with whom you can communicate directly at the resort. Also, later today, a “Question and Answer” package will be provided along with information regarding the CCAA process.



During the past few days, the company as its first priority engaged in securing and protecting your assets on the resort. At the time of writing, this process continues. As we take this step, we are mindful that it creates a situation that leaves many of you with uncertainty and concern. Please know, that your interests as owners remain a primary consideration as we develop our restructuring plan and move forward.



Regards

Derrick White
President, Newfound Canada

Some HVR answers - and the start of a plan!

Today's press release from Newfound NV (NFLD) announced that they have filed for "protection from the creditors" for Humber Valley Resort Corporation (HVRC). This provides at least a 30 day period for the company to submit a plan for the future. Ernst & Young have been appointed to work on the plan, and there has been consultation with provisional government.

It seems that this outcome is a positive move in a poor situation. All stakeholders have known for while that change is required. Now all involved in Humber Valley Resort (direct & indirect) have a breathing space, to plan for the viable future.

We're hoping to meet some key individuals over the next few days, and blog accordingly.
DG

__________________

Following is today's press release from Newfound NV ...

Humber Valley Resort Corporation (“HVRC”) Press Release
Friday, Sept 5, 2008 14:30 GMT.
Humber Valley Resort (“HVRC”) has today been granted protection against creditors, in the Supreme Court of Newfoundland and Labrador, under the Companies’ Creditors Arrangement Act (“CCAA”). This follows a review of HVRC’s financial position and particularly its various contractual commitments. The conclusion of the review was that HVRC, under its current structure and with its current commitments, is not financially viable.

As a result, the company filed for protection after carefully considering all options, including sending the company into receivership. After consulting with outside advisors, the company felt that all stakeholders, including chalet owners, investors/shareholders, HVRC employees, the surrounding communities and creditors would ultimately be best served by the proceedings and protections offered under CCAA.

The application was filed jointly as a plan of compromise or arrangement for HVRC, so as to include Newfoundland Travel and Tourism Corporation, Humber Valley Construction Limited and Humber Valley Interiors Limited, those affiliated companies that collectively comprise the Resort.

HVRC views the potential of this arrangement with its creditors, under the protections provided by CCAA, to be the most appropriate, fair and reasonable way to move forward with its plans to continue doing business. “HVRC is primarily concerned with protecting the interests of all stakeholders,” stated Derrick White, President of Newfound Canada, parent corporation of the affiliated companies, “and we believe CCAA provides us with the very best opportunity to work together with interested parties for the ongoing benefit of all.

”CCAA allows for a 30-day period during which HVRC will produce and present a plan to creditors regarding the reorganization of the Resort. HVRC sees this as a viable alternative to bankruptcy. “The company has been engaged in detailed consultation with the Government of Newfoundland and Labrador throughout its decision making process. It continues to see the resort as an asset to Newfoundland and Labrador, and consideration of those western Newfoundland communities that have served us well over the years will be at the forefront of the company’s mind,” said White.
__________________________

** NEW Subscribe to We are CrazyAboutNewfoundland.com by Email **

We're "planning" to be CrazyNewfoundland.com ... Are you?