Great River Journey has until July 14 to come up with a plan to pay its creditors, who are collectively owed $10.4 million.
That gives president George Asquith six weeks to save the fledgling tour company from bankruptcy.
After a Yukon Supreme Court judge agreed to the deadline extension on Monday, Asquith told reporters he remains hopeful he’ll rustle up new investors.
With a $2.5-million infusion, Asquith figures the business could relaunch next summer, although he concedes this season is a wash.
Four Yukon First Nations, the territorial government and Ottawa have already invested millions in the company, and they don’t appear keen to lend any more. Asquith went cap-in-hand to these investors in February for an additional $1.2 million, without luck.
The company, formed in 2007, hoped to persuade rich boomers to part with $6,500 for a weeklong tour down the Yukon River.
The guests would be sheltered from rain and wind in Plexiglas-clad motorboats as they travelled the river, regaled along the way with gold rush lore and First Nation history. Later, they would nosh on fine local foods such as caribou steaks, then retire to plush cabins replete with flush toilets and claw-foot bathtubs.
That was the plan, anyways. Then the money ran out.
The company found itself short of cash after its disappointing debut last summer. It banked on selling 300 seats. It sold 100 instead.
Asquith blamed the global economic downturn for keeping potential customers at home just as the company was getting off the ground. He maintains the only problem with the business was its timing.
In February, Asquith warned mothballing the operation for a summer would spell doom. Doing so would sow doubts in the minds of travel agencies about the company, and squander the publicity built up by ferrying around 50 travel writers and agents last summer, he said.
But now plans have changed, and Asquith is upbeat about the prospect of putting the operation on ice for one summer. Travel agents have been understanding, he said.
“We told them the truth. We’re in the process of restructuring and we’d love to see them next year.”
The company cancelled and refunded 60 seat bookings early in the year, he said. Great River Journey’s 35 employees remain laid off this year, but have been fully paid, said Asquith.
If the company is forced into bankruptcy, Asquith will be at the front of a long line of creditors waiting to be paid their due.
Among the secured creditors is a company called Great Northern Journeys Inc. It represents the majority shareholders of Great River Journey, who include Asquith and a group of Calgary venture capitalists.
They’ve sunk $5.13 million into the company. Of that, Asquith has contributed $800,000.
Other secured creditors include the Business Development Bank of Canada, which is waiting to be repaid a loan for $2.75 million, and four Yukon First Nations – the Kwanlin Dun, Ta’an Kwach’an, Tr’ondek Hwech’in and Selkirk First Nations – which have collectively invested $1.1 million.
The 76 unsecured creditors listed in court documents may not be so lucky if the company is forced into bankruptcy. They will all need to wait for secured investors to be paid-out first before receiving their due, if any money remains left.
These creditors include dozens of local businesses, including contractors who helped build Great River Journey’s three fancy cabins in the wilderness, dogsled mushers and fuel providers.
Asquith is also listed among these unsecured creditors, for a CIBC Visa account with $193,373.34 outstanding.
“I’ve invested about $1 million in this,” he said. “I’m on the list the same as everyone else.”
Asquith is a lawyer who got into the tourism business to help a friend launch a successful submarine tour company in the Cayman Islands. He grew up in Toronto but is a longtime Whitehorse resident.
The Yukon government has invested $630,000 in Great River Journey since 2007. Ottawa has spent about $3.5 million in various grants and loans.
Asquith had billed the tours as an “important icon project” offering wealthy boomers a chance to commune with the northern wilderness in comfort. He points to praise in high-profile magazines such as Forbes and National Geographic as evidence that the idea is sound.
“We had more buzz around this thing than anything else in the territory,” he said.
“This thing’s got legs. The fundamentals are good. It’s just tough to get launched.”
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