Camrose Casino owner ordered into receivership

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An Alberta court has ordered the company that owns Camrose Casino into receivership.

“We’re all a little flummoxed by this,” said Howard Pechet, president of Mayfield Investments Ltd., the casino’s owner.

The decision was made on Thursday morning by Court of King’s Bench Justice M. T. Lema, for debts unpaid to ATB Financial. Following two previous forbearance agreements in July and August, the verdict was handed out after the debtors met several of the forbearance’s default criteria listed in the court documents.

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The decision could have implications for recent efforts to relocate the Camrose Casino, as a receiver will take control of the business dealings. Pechet said he’s hoping the decision can be reversed.

Accounting firm Ernst and Young has been appointed as the receiver, which gives it control of “all of the Debtor’s current and future assets, undertakings and properties of every nature and kind whatsoever, and wherever situate, including all proceeds,” according to the documents.

Ernst and Young will be responsible for business decisions related to Mayfield Investment, Howard Pechet Chalmers Investment Corp. Ltd., Mayfield Homes Ltd., and Pechet 2018 Family Winery Trust — all listed as defendants in the case.

The defaulted criteria includes a failure to produce an unconditional commitment letter from Canadian Western Bank (CWB), which was part of a previous forbearance agreement. Court documents also state that the defendants failed to provide a “finalized version of the written proposal setting out the Obligors’ plan for the repayment, in full, of the Indebtedness,” for the debts remaining after proceeds committed by CWB and refinancing options.

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The rest of the defaulted forbearance agreement criteria include:

“The Obligors failed to provide account statements for all non-ATB accounts (as defined in the Forbearance Agreement);”

“The Obligors failed to provide one or more Sale Proposals (as defined in the Second Amending Agreement), in executable form, to the Lender and the Financial Advisor;”

“The Obligors failed to provide the Lender with biweekly reconciliations of Priority Payables (as defined in Forbearance Agreement), and evidence that all payments due under Vendor Payment Plans (as defined in the Second Amending Agreement) in the preceding two-week period have been made;”

Among the many investments related to the Mayfield Investment portfolio, the company holds shares in the Camrose Casino Corp. (now Camrose Casino Ltd.) and Fort Nelson Hotel (Alberta) Ltd. It is also listed under the Partnership Act with the Medicine Hat Lodge and Convention Centre.

Ernst and Young is authorized to take possession and exercise control of the properties, change locks and door codes, and conduct regular business on behalf of the debtors, among a long list of other empowerments under the order.

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Pechet asserted his company has maintained a strong financial reputation for many years.

“We’ve been good clients, as Treasury branch has reiterated on numerous occasions, for Alberta Treasury grants for 50 years now,” said Pechet.

The Camrose Regional Exhibition (CRE), which is well-known for hosting Big Valley Jamboree Music Festival, have been a creditor for Camrose Casino, and by extension Mayfield Investments, since 2006 when the casino was being built.

“When they couldn’t get financing to finish construction on that venue, which is next door to us, we’re literally just south of it, they came to the board of CRE and said, ‘Oh, we need help,’ ” said the exhibition society’s executive director Dianne Kohler.

Kohler said her organization loaned Mayfield $2.5 million to help it finish construction. CRE was getting regular repayments, she said, until it suddenly stopped around the same time as the COVID-19 pandemic, leaving the group out $1.8 million.

“So, it’s a big hit to us as a charitable organization,” said Kohler.

The receivership comes on the heels of a recent Alberta Gaming Liquor Cannabis (AGLC) decision to approve Camrose Casino’s request to relocate to Edmonton. The recent approval for relocation came after a previous attempt failed due at least in part to large public outcry against the move, which included the CRE.

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The most recent application attracted similar backlash, but AGLC decided to approve it on the grounds that the application differed and the new location could support higher rural charity revenues, among other reasons.

Pechet declined on Friday to say what the impact of the receivership could mean to the casino’s relocation but said that there would be more information on what could happen in the future on Monday.

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