What if Newfound NV want HVR back?

New investors in Newfound NV injected cash specifically into Humber Valley Resort in Summer 08, but appeared to fail in its due diligence, and quickly realised that all was not as it originally seemed. By September 08 Newfound NV had taken HVR into (CCAA) administration and then by December 08 into bankruptcy, openly blaming the provincial government for its predicament - blame which in turn and equally openly the government rejects point blank. [see Western Star article]

But what next?
Hopefully new owners and operators of the resort will be found quickly, and that will work properly with the chalet owners, the local communities/businesses, and the provincial government.

But what if Newfound NV want HVR back?
It's not impossible! Has the whole process been staged to clear the creditors and "start again"? Lets hope not, as all involved need the main operators of the resort to be passionate about Western Newfoundland and the Humber Valley, not just their shareholders.

Above all, if the goal is not to attract tourists and guests to the area - it's not going to work. We've suffered four years of inbalance between schmoozing potential investors, and attracting real holiday makers, resulting in actually the main visitors being the owners and their friends and family.

So how would everyone react if Newfound NV (or one of its partner entities) tries to buy back the resort out of bankruptcy?

Rumours abound!!!

What do you think? If you've got a view, hit the comments link below!!!

Government did not want resort to go bankrupt

No such preference; Government did not want resort to go bankrupt: Marshall
GARY KEAN The Western Star

CORNER BROOK — Justice Minister Tom Marshall has taken issue with the parent company of Humber Valley Resort’s stance that it was the government’s “preference” for the operation to go bankrupt.

The Tory legislature member for Humber East, whose duties include monitoring developments at the beleaguered resort situated in his district, said government was not about to use the province’s resources to bail out the private business.

The Humber Valley Resort Corporation (HVRC), a subsidiary of parent company Newfound NV, terminated its protection from creditors one week ago today. That same day, the resort filed an assignment in bankruptcy.

This past Monday, chalet owners and other creditors were sent a letter from Stephen Bentley, Newfound’s group finance director, notifying them that bankruptcy has been filed for, and that Newfound, which had sunk about $46 million into the resort, is also now a creditor.
In the correspondence, Bentley reiterated Newfound’s stance that bankruptcy was not the resort corporation’s intention and its chances of avoiding such measures depended on support from the provincial government. The resort wanted government to help maintain direct flights to the United Kingdom, help a local, incorporated municipality to administer basic services such as snowclearing and garbage collection, and free up land the resort had been leasing until recently.

“Whilst initial discussions appeared to be fruitful, in recent weeks it has become clear through media reports and correspondence with the company that the government of Newfoundland would prefer that the resort goes into bankruptcy before they make a decision on their future involvement with HVRC,” wrote Bentley.

Marshall said the province still has not ruled out enhancing marketing effort towards helping fill charter flights, and the Department of Municipal Affairs will work with any municipality considering expanding its services to the resort, but was not going to invest any money directly in the resort.

Fair market value
When it came to the Crown land issue, though, he said there was no way the government was going to give that up without getting fair market value in return.

“Mr. Bentley said it was government’s preference they go bankrupt — we had no such preference,” Marshall said. “...Government’s relationship with the resort was as a landlord only. We had nothing to do with the fact they sought protection under the CCAA and we did not indicate to them in any way they should go bankrupt. That was a decision they made and had nothing to do with government.”

The minister said his 32 years of practising law has shown him that it is typical for businesses that go bankrupt to shift blame for the downfall.

“The research clearly indicates that the majority of businesses that fail, fail because of poor or incompetent management,” he said. “Any business, when it fails, will blame government, their lawyers or accountants. They will assign blame to many people when, in reality, the blame should be assigned to the person they see in the mirror.”

Now that bankruptcy has been filed for, the assets of the resort — including all real property, buildings, equipment and accounts receivable — have been assigned to the firm Ernst and Young, which was the court-appointed monitor of the resort’s activities during the creditor protection phase of its attempt to restructure.

“We are the trustee in bankruptcy until the first meeting of creditors, at which time the creditors will confirm us as trustee or substitute another in our place,” Mathew Harris, managing partner of Ernst and Young’s Atlantic Canada Office, told The Western Star via e-mail correspondence.

“After the meeting of creditors, the trustee will begin the process of liquidating assets — possibly by a tender sale.” That meeting of creditors and the trustee is scheduled to be held in St. John’s Jan. 7.“At that meeting, they (creditors) will elect inspectors to represent the general body of creditors,” said Harris. “The board of inspectors will give direction to the trustee in the administration of the estate.”

Harris could not speculate on how long the process of liquidating assets would take. The money generated from selling off resort assets would eventually be distributed among creditors in accordance with a scheme of priority set out in the federal Bankruptcy and Insolvency Act.
Harris said there are several hundred creditors involved, representing indebtedness totalling roughly $65 million. While Newfound NV is one of those creditors, it does not hold any special status.

It is possible Newfound NV could eventually buy the property back. Harris said the bankruptcy process would not give Newfound NV any particular advantage over any other entity interested in taking over the facility.

Western Star web article

We're crazyaboutnewfoundland.ca ... Are you?
Some Newfie videos at crazyaboutnewfoundland.ca/video

And some strong comments already appearing on the Western Star site - including "Go away Newfound NV ..."

Goodbye Newfound NV

The formal press release from Newfound NV today, was the final goodbye from Humber Valley Resort's (ex-)parent company. Now it's down to the court and it's nominated representatives.

The Newfound NV release follows:
_________________________________________________

Newfound N.V.

Humber Valley Resort Corporation - update

Newfound N.V. (AIM: NFND) announces that its subsidiary, Humber Valley Resort Corporation ("HVRC"), has filed for bankruptcy following the expiry of proceedings under the Canadian Companies Creditors Arrangement Act ("CCAA") initiated in September2008.

This action does not impact either the financial situation of Newfound NV or the projects at St. Kitts and Nevis, which remain unaffected.

Stephen Bentley, Group Finance Director of Newfound, said: "It was not our original intention that HVRC should make an application for bankruptcy. Indeed we had formulated a draft preliminary plan of arrangement that, in our view, gave the interested parties the best result given the unhappy circumstancesthat Humber Valley Resort Corporation found itself in.

However, our plans required and depended on support from the Government of Newfoundland. Their support was needed specifically with regard to flights to Newfoundland from the UK; support for the municipality that would administer basic services to the resort; and finally, a grant of freehold by the government over the portions of long leasehold land already paid for by HVRC. Whilst initial discussions appeared to be fruitful, in recent weeks it has become clear through media reports and correspondencewith the company, that the Government of Newfoundland would prefer that the resort goes into bankruptcy before they make a decision on their future involvement with HVRC.

In these circumstances, and with Newfound continuing to finance the CCAA process each month, the Board feels it is not appropriate for Newfound to carry on spending significant sums of money where there appears to be little or no prospect of bringingthe process to a firm resolution. We therefore have no alternative but to allow the CCAA process to lapse and for HVRC to file for bankruptcy. I deeply regret that this has come to pass and that Newfound, as the largest fiscal creditor, now joins thewider list of creditors awaiting the outcome of the bankruptcy process."

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

Last call for creditors to Humber Valley Resort

Monday 1st 5pm ... that's the deadline for creditors!

Owners, construction companies, suppliers and others are all busy completing their CCAA claim forms. What next? Time will tell - perhaps before the next court deadline of Fri 5th Dec.

Christmas eCards

Hey - want to send electronic Christmas Cards (with Western Newfoundland scenes) this year?

Try out www.crazyaboutnewfoundland.ca/christmas

Advertise your chalet online ...

Finding the right way to advertise your holiday home or investment property is key to finding holiday lets. With the ongoing HST issues for HVR chalet owners, and the lack of co-ordinated marketing effort, online advertising has never been more important.

Here is an offer to get 25% extra adertising time with holidaylettings.co.uk ... take the link below, and set up your own online advert. If you like what you see you can pay for 12 months, and get 15. It costs nothings to set it up and have a look - so give it a try.

Click here to get more details, and the link to the offer.

www.crazyaboutnewfoundland.ca/holidaylettings.co.uk