Jon Rudolph’s business empire is falling like a row of dominos.
The construction and mine reclamation magnate lost possession of more than 130 trucks, trailers and other heavy equipment last week after one of his companies couldn’t repay a $7 million loan to its largest creditor, General Electric.
That partial receivership hinged on the bankruptcy of another of Rudolph’s companies, Ross Mining Limited, late this summer.
And both those legal dustups happened at the same time as the failure of another Rudolph enterprise, the Ruby Creek mine, last year.
Not only that, Rudolph still has to make peace with several other creditors who are, in total, looking for more than $4 million in loan payments.
Still, the media-shy businessman is claiming he’s not bankrupt and can fight back.
Rudolph’s troubles with GE Canada Equipment Financing GP began in September, when GE came knocking on Rudolph’s door looking for $750,000 in loan payments that one of Rudolph’s many business outfits, Golden Hill Ventures Limited, failed to pay.
Rudolph had previously secured the $7 million loan from GE with mining and construction equipment, including a Bell helicopter.
GE wasn’t interested in tinkering with the loan agreement, as Rudolph had requested three times previous.
The multinational corporation wasn’t too keen on Rudolph’s attempt to stay their request for the loan payments either.
By mid-November, GE demanded its entire $7 million back.
GE has concerns about Rudolph’s viability in the near future.
There was a host of other creditors lining up behind GE to get their money from Rudolph.
The equipment was scattered across the Yukon and British Columbia in remote locations, making them susceptible to damage.
But also, Rudolph had proven to be unco-operative and belligerent during the bankruptcy trial of his other company, the Ross Mining Limited, GE said in court documents.
Rudolph’s proposal to pay off the GE loan is “not viable and (has) no legitimate chance of success as it is based on the collection of a significant receivable from Ross Mining Limited, an entity that is insolvent,” according to GE’s court submissions.
Golden Hill’s own consolidated financial statements from December 2008 state it was waiting on a $10.6-million payment from Ross Mining, GE adds.
Also, staff from PricewaterhouseCoopers, a monitor appointed by the court to survey Ross Mining’s holdings in that case, were threatened and physically intimidated by Rudolph and his son Shawn.
Rudolph also caused numerous delays during the monitor’s survey and sometimes didn’t return phone calls for several days, according to court documents.
This time around, GE wasn’t taking any chances.
On December 11, both GE and Golden Hill Ventures agreed to appoint international auditors Deloitte & Touche as a receiver for the equipment GE had secured against Golden Hill.
Four days later, Justice Leigh Gower approved the arrangement.
Several dozen off-road trucks, fuel trucks, wheel loaders and tractors were handed over from Rudolph’s possession to Deloitte’s, along with fuel tanks, a mining drill, two ATCO portable trailers and a small Bell helicopter.
“This is NOT a receivership of either (Golden Hill Ventures Limited Partnership) or (Golden Hill Ventures Limited),” wrote Rudolph in a hand-delivered statement to media released on Monday.
Golden Hill Ventures Limited is a shell company that owns 99 per cent of Golden Hill Ventures Limited Partnership.
“The receiver is leaving the GE equipment with Golden Hill Ventures Limited Partnership and GE is co-operating with Golden Hill Ventures Limited Partnership and Golden Hill Ventures Limited in proceeding with the proposal under the (Bankruptcy and Insolvency Act),” says Rudolph’s statement.
Rudolph is “reorganizing” his companies, the statement says, but no details are provided. The Golden Hill Ventures office did not return a message requesting an interview.
Rudolph’s lawyers still have to deal with several other secured creditors that haven’t yet been paid, including Caterpillar Financial, the Business Development Bank of Canada, the Canadian Western Bank and Wajax Finance.
Golden Hill owes the creditors, including GE, a total of $14 million. It also owes the Canada Revenue Agency $1.9 million.
Future proceedings will likely get bogged down in what materials Rudolph is able to use to pay off his loan payments.
Rudolph runs a complex web of companies that have lent money and equipment to each other, and the court will likely have to filter through Rudolph’s finances to find suitable receivership arrangements.
He’s the sole owner of a Ross Mining Limited, Mammoth Tusk Gold Incorporated, Golden Hill Ventures Limited and Yukon Adventures Incorporated.
Rudolph re-arranged the holdings within his companies during the last decade as he expanded outside of the construction and mine-reclamation business and into mining proper with the Ross Mining and Ruby Creek investments.
Yukon Adventures is registered in Alaska and was used to buy a yacht, named Northern Romance. It’s not clear whether Rudolph will have to sell the boat to pay off his loans.
Contact James Munson at
jamesm@yukon-news.com