FRPL vs Northwynd?
So can someone help me interpret this? FRPL which owns Fairmont, transfers all of its assets to Northwynd LP, which happens to be the main creditor, then FRPL declares bankruptcy. Northwynd retains same offices, same staff and I like how they say below "Northwynd LP is not charging the Estate for the storage costs associated with holding the books and records. "
So same staff and people are involved, how is it that Northwynd claims the poor state of present conditions and financial situationat Fairmont are a result of the previous owners? Are they not the same?
If any accountants want to spend a few hours looking over the books during the bankruptcy period, have at er.
http://documentcentre.eycan.com/Pages/Main.aspx?SID=107
IN THE MATTER OF THE BANKRUPTCY OF
FAIRMONT RESORT PROPERTIES LTD.
OF THE CITY OF CALGARY,
IN THE PROVINCE OF ALBERTA
REPORT ON THE TRUSTEE'S
PRELIMINARY ADMINISTRATION
ESTATE NO. 25-1388975
On July 30, 2010, Fairmont Resort Properties Ltd. (“FRP”) filed an assignment pursuant
to the provisions of the Bankruptcy and Insolvency Act (“BIA”) and Ernst & Young Inc.,
was appointed as trustee of the estate of the bankrupt by the official receiver.
Background
FRP was incorporated on February 9, 1979 in the Province of Alberta and carried on
business in the Provinces of Alberta and British Columbia. FRP was considered the
ultimate parent company for all of its direct and indirect subsidiaries and it provided
management leadership, accounting and administrative services to all of these entities.
FRP was also a developer of certain time share villas (the “Villas”) at Fairmont Hot
Springs, British Columbia that represented at one point a total production of 250 Villas in
this resort.
The Fairmont Group’s (which consist of the following entities: FRP, Lake Okanagan Resort
(2001) Ltd., (“LOR”), Lake Okanagan Resort Vacation (2001) Ltd. (“LORV”) and LL
Developments Ltd. (“LLD”) ) financial deterioration started on or around December 2008 when
it could not meet its current interest and principle payments when they became due to its secured
creditors.
The Fairmont Group entered into a forbearance agreement (including amendments thereto) with
its secured creditors that required the Fairmont Group to achieve certain financial results and/or
requirements up until March 30, 2009. The Fairmont Group was unsuccessful in improving its
financial position and, as a result, breached the terms of the forbearance agreement.
As a result, the Fairmont Group’s two main secured creditors applied to the Alberta Court of
Queen’s Bench (the “Court”), with the consent of the Fairmont Group, to seek and obtain
creditor protection for the Fairmont Group under the Companies’ Creditors Arrangement Act,
R.S.C. 1985 c. C-36, as amended (the “CCAA”) pursuant to a court order dated March 30, 2009
(the “Initial Order”). Ernst & Young Inc., was appointed monitor of the Fairmont Group during
these CCAA proceedings (the “Monitor”). — 2 —
On June 15, 2010, the Fairmont Group entered into and finalized various terms and
conditions set out in a foreclosure agreement (the “Foreclosure Agreement”) as at June
15, 2010 and entered into by FRP, LOR, LORV and its main secured creditor Northwynd
LP.
On June 22, 2010, an order was granted by the court (the “Vesting Order”) to allow the
vesting of and transferring of title to, the various assets of FRP, LOR and LORV in
favour of Northwynd LP, in relation to the Foreclosure Agreement. The Vesting Order
was filed with the court on July 5, 2010.
On July 29, 2010, the CCAA was terminated and all that remained within FRP were
certain significant secured creditor deficiency claims, pre-CCAA unsecured claims.
Preliminary Evaluation of Property, Assets and Undertakings
Pursuant to the Vesting Order discussed above, there are presently no assets available to the
Trustee for realization as all of the assets have been transferred and vested to Northwynd
LP.
Conservatory & Protective Measures
As of July 30, 2010, FRP did not have any operations, employees, premises and assets.
The only items in possession of FRP were books and records located in Northwynd LP’s
offices. As a result, the Trustee arranged for Northwynd LP to maintain the books and
records in a secure location to allow the Trustee access when needed. Northwynd LP is
not charging the Estate for the storage costs associated with holding the books and
records.
Books and records
As discussed above, the books and records of FRP that are required for the Trustee's review
are located at the former premises of FRP in Calgary, Alberta.
Provable Claims and Secured Claims
The only liabilities the Trustee is aware of are significant deficiency claims owed to
FRP’s secured creditors and unsecured liabilities as listed on the Statement of Affairs.
Legal Proceedings
No legal proceedings have been instituted by the Trustee to date.
The Trustee is not aware of any legal proceedings for or against the Company. — 3 —
Reviewable Transactions and Preference Payments
A preliminary review of the book and records for the last 12 months did not reveal any
transactions which could be considered preferences or reviewable transactions.
Trustee’s intention to act
The Trustee has no intention act for secured creditors, as set out in subsection 13.4(1.1)
of the BIA.
Possible Conflict of Interest
Ernst & Young Inc. acted as monitor in FRP’s CCAA proceedings referred to above
which is not considered to be a conflict of interest.
Third Party Deposits
The Trustee received a $5,000 deposit from Northwynd LP to pay the Trustee's
administration fees and disbursements in the bankrupt estate.
Anticipated Realization and Projected Distribution
All of the assets of FRP have been foreclosed upon by the secured creditors and transferred
out of FRP. The Trustee does not anticipate a distribution to any creditors.
ERNST & YOUNG INC.
Trustee for the Estate of
Fairmont Resort Properties Ltd.
Neil Narfason, CA•CIRP, CBV
Senior Vice-President
August 18, 2010
I have advised our law firm although I am sure they have it already.
:ignore::deadhorse: