Liquidate Canad Inns: receiver
Seeks order amid aftermath of Crocus
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Hey there, time traveller!
This article was published 26/11/2014 (4150 days ago), so information in it may no longer be current.
The receiver for the Crocus Investment Fund has turned to the courts, seeking an order that Canad Inns be liquidated and dissolved and the proceeds distributed to Crocus shareholders.
The receiver is also targeting Canad Inns CEO Leo Ledohowski.
Last June, the receiver began legal action against Ledohowski, CEO of Canad Inns, the company itself and LRC Holding Corp.
The now-defunct labour-sponsored fund Crocus bought a 16 per cent stake in Canad Inns in 1999 for $5 million. The Winnipeg-based hotel and entertainment company owns more than 10 hotels in Manitoba and North Dakota, the Tavern United pub, Garbonzo’s Pizza Pub and the Metropolitan Entertainment Centre.
In its notice of application, Deloitte Restructuring Inc., the Crocus receiver, is seeking forms of relief including declarations Ledohowski had exercised his powers as a director of Canad Inns and the company had conducted its business and affairs “in a manner that was oppressive of, or unfairly prejudicial to, or which unfairly disregarded, the interests of Crocus as a shareholder of Canad Inns.”
The notice also sought an order that Canad Inns be liquidated and dissolved and the proceeds distributed to its shareholders.
In an email, a Canad Inns spokeswoman said the company rejects the allegations that have been made by the receiver.
“It is full of inaccurate information. We will be vigorously defending the application. We have not yet filed our response but will be doing so,” she said.
Deloitte was appointed receiver by the Manitoba Court of Queen’s Bench in 2005.
The receiver has been given court approval to make an $8.6-million payout to unitholders of the defunct labour-sponsored fund. The payout is the third distribution to shareholders.
That works out to 60 cents per share and leaves $2.8 million within the receivership estate, according to Deloitte’s most recent report.
Shareholders who have maintained RRSP accounts will have the option of transferring their portion of the distribution to another tax-deferred account, or deregistering the funds, which would cause them to be taxable.
The receiver determined some money needed to be held back to cover certain financial obligations, including lease costs at its former head office at 211 Bannatyne Ave., ongoing monitoring requirements for the remaining investments and legal fees associated with litigation with one of the investments, presumably Canad Inns Corp.
In September 2009, the court approved the first interim distribution of $54.7 million to Crocus shareholders. In December 2011, the court authorized a second interim distribution of $9 million.
geoff.kirbyson@freepress.mb.ca