Peter Jenkins will pay $281,000 in less than six months or he’ll lose the Eldorado Hotel.
This after a court hearing on Tuesday.
For those keeping tabs, it’s 90 per cent of the money he currently owes the Yukon government.
That’s the deal he brokered with Dana Naye Ventures.
Dana Naye, a non-profit financial advisory firm in Whitehorse, has been managing the government’s outstanding loans since March 2005.
Jenkins wracked up more than $300,000 in debt since he received a $125,000 government-sponsored mortgage in 1990 for the Eldorado Hotel in Dawson City.
Most of the money Jenkins owes is interest on that original loan.
Now, the former cabinet minister will not pay back the full amount.
In a Yukon Supreme Court hearing this week he was ordered to pay only $281,000, plus the interest that accrues until debt is paid.
Interest will be charged at the same rate as his mortgage, which is pegged at 13.57 per cent.
“In our view it made sense to effectively accept 90 cents on the dollar rather than going through a lengthy battle and having that additional 10 per cent eaten up in court costs,” said Dana Naye spokesperson, Wayne McLennan, who is processing the Jenkins’ file.
It’s a matter of weighing the full amount owed against the cost of getting there, said McLennan.
“You can go through a lengthy, contested court battle to try and get the full amount,” he said in an interview Tuesday afternoon.
“Or, if both parties come to an agreement on a realistic amount, you can avoid going through a lengthy court battle.”
There are no blanket rules for dealing with outstanding loans, added McLennan.
“In each case you look at a file on its own merits,” he said.
“You’re making a judgment call. And, in our view, it made sense in this particular case.”
At this point, the hotel remains in Jenkins’ hands.
While court documents state he has six months to pay the loan, Dana Naye has negotiated a shorter time frame, said McLennan.
When asked by The News what the reduced period is, McLennan would not say.
If Jenkins breaks the agreement within the shortened time, however, the government can seize his Eldorado Hotel and sell it, or appoint someone else to run it.
“It gives us the security that we know that if the agreement is breeched, we can just move ahead and foreclose on the property,” added McLennan.
“Agreements like this are not generally put in place unless (the person owing) has every intention of paying the money.”
The lawsuit was initially filed against Jenkins and his Vancouver-based company, Dawson City Hotels Ltd., in November 2005.
“It’s our desire to settle this and settle it in an amicable manner,” said Jenkins at the time.
Formerly one of the Yukon Party’s most influential politicians, Jenkins crossed the floor to sit as an independent member of the opposition just 10 days after the civil action was filed against him.
Although he could not be reached for comment by deadline, Jenkins has previously denied the lawsuit was a factor in his decision to leave the Yukon Party.
At this point, the next step is simple, said McLennan.
“Wait for my money,” he said.