Mining magnate denied debt to himself

Yukon businessman Jon Rudolph owes money to many people including, he insists, himself.

Yukon businessman Jon Rudolph owes money to many people including, he insists, himself.

But the mining mogul’s claim that he should pay himself first, before dealing with angry debtors, was recently rejected by the Yukon Supreme Court.

Rudolph bought the Ross placer mine on Dominion Creek, 80 kilometres southeast of Dawson City, in 2005. It formed part of the construction and mining empire that Rudolph had cobbled together over two decades. As Rudolph’s businesses grew, he even became the patron of a prestigious Christmas ball in Whitehorse.

Then the bills began to pile up and the empire came tumbling down.

Last year Rudolph was forced to sell 130 pieces of heavy equipment owned by one of his companies, Golden Hill Ventures Limited.

In all, Rudolph owed $12 million to creditors. In an agreement struck last year, they ended up being paid just five cents on every dollar owed.

Throughout it all, Rudolph insisted he wasn’t bankrupt – he just needed time to restructure his businesses and strike a new loan agreement.

Yet two big debts remain unpaid today.

He owes Norman Ross, the placer mine’s founder, $3.4 million. He also owes Mackenzie Petroleums $739,500 for fuel supplied to the mine operation.

When both Ross and the fuel company made legal claims to the mine’s assets two years ago, Rudolph responded by making a similar claim, or lien, of his own for $4.7 million.

But, in a judgment issued last week, Yukon Supreme Court Justice Ron Veale decided that to allow this would be “completely contrary to the object and purpose” of the Miners Lien Act.

Rudolph’s case depended on the complicated corporate structure put in place at the mine, involving three separate companies: Golden Hill Ventures Limited, Golden Hill Ventures Limited Partnership and Ross Mining.

All three companies are based out of the same building, using the same staff and blanket insurance.

And, in all cases, the “sole proprietor and controlling mind” is Rudolph, said Veale.

Essentially, Ross Mining subcontracted Golden Hill to run the mine. And when Ross Mining went bust, Golden Hill asserted that it had been soaked, too.

Just how much it was owed, fluctuated in court. Originally $4.7 million, the amount rose to $6.8 million and later fell to $2.8 million as the judge began to weed out questionable claims.

Yet Golden Hill did more than work for Ross Mining. It also managed Ross’s accounting, payroll and government filings. Veale concluded that Golden Hill is “both owner and supplier” of Ross Mining so it would be nonsense to award it a lien against the company.

John Wierda, a director of Mackenzie Petroleums, said this week that his company will continue to pursue its lien. Having to operate without such a large payment presents a “huge” challenge to the company, he said.

Rudolph did not respond to an interview request.

Contact John Thompson at

johnt@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Yukon MP Larry Bagnell, along with Yukon health and education delegates, announce a new medical research initiative via a Zoom conference on Jan. 21. (Screen shot)
New medical research unit at Yukon University launched

The SPOR SUPPORT Unit will implement patient-first research practices

Yukon First Nation Education Directorate members Bill Bennett, community engagement coordinator and Mobile Therapeutic Unit team lead, left, and Katherine Alexander, director of policy and analytics, speak to the News about the Mobile Therapeutic Unit that will provide education and health support to students in the communities. (yfned.ca)
Mobile Therapeutic Unit will bring education, health support to Indigenous rural students

The mobile unit will begin travelling to communities in the coming weeks

Premier Sandy Silver, left, and Chief Medical Officer of Health Dr. Brendan Hanley, speak during a live stream in Whitehorse on January 20, about the new swish and gargle COVID-19 tests. (Crystal Schick/Yukon News)
Swish and spit COVID-19 test now available in Yukon

Vaccination efforts continue in Whitehorse and smaller communities in the territory

Local poet Joanna Lilley is photographed at the Beringia Centre in Whitehorse on Jan. 20, where she will be hosting a poetry workshop on Jan. 24. (Crystal Schick/Yukon News)
Poetry for the ages

Workshop set for the Yukon Beringia Centre

Parking attendant Const. Ouellet puts a parking ticket on the windshield of a vehicle in downtown Whitehorse on Dec. 6, 2018. The City of Whitehorse is hoping to write of nearly $300,000 in outstanding fees, bylaw fines and court fees, $20,225 of which is attributed to parking fines issued to non-Yukon license plates. (Crystal Schick/Yukon News file)
City of Whitehorse could write off nearly $300,000

The City of Whitehorse could write off $294,345 in outstanding fees, bylaw… Continue reading

Grants available to address gender-based violence

Organizations could receive up to $200,000

In this illustration, artist-journalist Charles Fripp reveals the human side of tragedy on the Stikine trail to the Klondike in 1898. A man chases his partner around the tent with an axe, while a third man follows, attempting to intervene. (The Daily Graphic/July 27, 1898)
History Hunter: Charles Fripp — gold rush artist

The Alaskan coastal town of Wrangell was ill-equipped for the tide of… Continue reading

A man walks passed the polling place sign at city hall in Whitehorse on Oct. 18, 2018. While Whitehorse Mayor Dan Curtis is now setting his sights on the upcoming territorial election, other members of council are still pondering their election plans for the coming year. (Crystal Schick/Yukon News file)
Councillors undecided on election plans

Municipal vote set for Oct. 21

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decicions made by Whitehorse city council this week.

A file photo of grizzly bear along the highway outside Dawson City. Yukon conservation officers euthanized a grizzly bear Jan. 15 that was originally sighted near Braeburn. (Alistair Maitland/Yukon News file)
Male grizzly euthanized near Braeburn

Yukon conservation officers have euthanized a grizzly bear that was originally sighted… Continue reading

Mayor Dan Curtis listens to a councillor on the phone during a city council meeting in Whitehorse on April 14, 2020. Curtis announced Jan. 14 that he intends to seek nomination to be the Yukon Liberal candidate for Whitehorse Centre in the 2021 territorial election. (Crystal Schick/Yukon News)
Whitehorse mayor seeking nomination for territorial election

Whitehorse mayor Dan Curtis is preparing for a run in the upcoming… Continue reading

Gerard Redinger was charged under the <em>Civil Emergency Measures Act</em> with failing to self-isolate and failing to transit through the Yukon in under 24 hours. (Joel Krahn/Yukon News file)
Man ticketed $1,150 at Wolf Creek campground for failing to self-isolate

Gerard Redinger signed a 24-hour transit declaration, ticketed 13 days later

Most Read