Pay us back or we’ll have your assets seized and sold: that’s the message sent by the Business Development Bank of Canada to Yukon’s beleaguered, hoity-toity tourism venture, Great River Journey, through recent Supreme Court filings.
The company has defaulted on payments to the bank since last fall. It is in arrears $412,500.
So the bank now wants all it’s owed -Â $2.776 million. And it wants to ensure it’s first in line to pick over the company’s carcass if its assets are liquidated.
Other secured creditors are the company’s investors.
FNIC Development Corporation represents four First Nation investors – the Kwanlin Dun, Ta’an Kwach’an, Tr’ondek Hwech’in and Selkirk First Nations – who have collectively invested $1.1 million.
And Great Northern Journeys represents the majority shareholders of Great River Journey, who include president George Asquith and a group of Calgary venture capitalists. They’ve sunk $5.13 million into the company. Of that, Asquith has contributed $800,000.
The bank wants these investors to take a number and wait in line if the company goes belly-up. Behind these investors are 76 unsecured creditors, from Aasman Design to Yukon Yamaha, also waiting to be paid.
The bank recently appraised two properties owned by Great River Journey. One, which is the site of a small cabin on Coffee Creek, 140 kilometres south of Dawson City, is valued at $41,000.
The other is the site of a chalet and small cabins on the southeast end of Lake Laberge. It’s valued at $746,000 – about half of the cost of building the facilities in such a remote location, from the appraiser’s estimate.
George Asquith, the company’s president, warned as much earlier this year. He’s insisted that liquidating the company’s assets would only produce a small fraction of the funds needed to pay off the company’s creditors, who are collectively owed $10.4 million.
The courts have pushed back the deadline for him to come up with a plan to pay his creditors until later this month.
Great River Journey was formed in 2007 with the hope of persuading rich boomers to part with $6,500 for a week-long tour down the Yukon River.
Guests would be sheltered from rain and wind in Plexiglas-clad motorboats as they travelled the river, and 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.
But the company found itself short of cash after its disappointing debut last summer. Asquith has 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.
The Yukon government has invested $630,000 in Great River Journey. But it balked this spring when Asquith asked to be bailed out.
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