Len Barrie is facing multiple lawsuits from unhappy creditors, and Bear Mountain, his prize golf resort and development, has been seized by his lenders - but he is talking about a dramatic turnaround within a month.
A few hours after Bear Mountain's latest court date was adjourned on Friday, a chipper-sounding Mr. Barrie said he is working on a restructuring plan that could rescue the development, which owes its secured creditors more than $300-million, within a month. Bear Mountain was pushed into bankruptcy proceedings by its major lender, HSBC Bank Canada.
"Just watch over the next month," Mr. Barrie said. "The world is getting better. We'll see. It will be an interesting month."
Mr. Barrie, whose long-promised investment of $350-million by a company based in Dubai never materialized, declined to go into details. "Call me in 30 days," he said.
He was accused by Scott Bye, a member of the executive committee of Bear Mountain Master Partnership, the development's parent company, of improperly taking between $16-million and $20-million out of the company to buy a 35-per-cent stake in the Tampa Bay Lightning in 2008. Mr. Bye, a financial manager who represents several current and former NHL players who invested in Bear Mountain, said Mr. Barrie admitted using the money to buy into the Lightning and never paid it back.
Last fall, Mr. Barrie insisted the amount owed was actually $5-million and that he was entitled to the money. He also said a full accounting was made to the executive committee. Mr. Bye said then no such accounting was made, only an acknowledgment by Mr. Barrie that he used Bear Mountain money to help pay for his share of the Lightning. Mr. Bye declined to comment further on Friday.
Robert Holmes of Prowis Inc., who was appointed by the Supreme Court of British Columbia to oversee Bear Mountain's Companies' Creditors Arrangement Act case, told the court he requires answers about some transactions concerning Mr. Barrie's company, Bear Mountain Development Holdings Ltd. (BMDH). Mr. Holmes did not mention the Lightning in a report to the court, but BMDH played a central role in accusations that Mr. Barrie used it to funnel money from Bear Mountain to the Lightning.
In his report, Mr. Holmes said BMDH financial statements were "materially misstated as certain transactions which transferred money out of the company were not recorded." Mr. Holmes said he requested supporting documents from BMDH, but as of his report on May 14, "the documents provided were not complete."
Mr. Holmes declined to comment on the matter Friday, but Mr. Barrie said the documents are being prepared for Mr. Holmes. "The accountants are all lining it up. I'm comfortable with what is happening," he said.
Friday's court hearing was called to hear Mr. Holmes's request for the court to grant him the right to take Bear Mountain and the companies associated with it into bankruptcy. No reason was given for the adjournment, but in his May 14 report, Mr. Holmes also said finances of the Bear Mountain companies are so tangled he needs more time to sort them out.
Mr. Barrie's optimism that he can rescue Bear Mountain from bankruptcy is not shared by HSBC Bank Canada. In an affidavit filed with the court in March when the bank took over Bear Mountain and had Mr. Barrie removed as chief executive officer, one HSBC vice-president said the bank has given up hope it will ever see all of the $260-million it lent Bear Mountain. Another vice-president, Marshall Curtis, slammed Mr. Barrie and his management team in an affidavit.
"There are clearly no buyers for this project and no financiers or investors that are prepared to deal with existing management with the development being in the state it is in," Mr. Curtis said. "[Barrie and his partners]have not been willing or able to put up any capital.
"Existing management has lost our confidence and, we believe, the confidence of most of the principal stakeholders in the development."
HSBC did agree to advance more money to keep Bear Mountain operating to protect its investment. That means the Telus World Skins Game, which is set for June 21-22 with several professional golf stars, will be played.
Among the tangled finances Mr. Holmes is trying to iron out are Bear Mountain funds that Mr. Barrie, a former NHL player, admitted were used to help pay for his 35-per-cent share of the Lightning, which he bought in June, 2008. After Mr. Barrie ran into financial problems with Bear Mountain and the Lightning and had a falling-out with his partner Oren Koules, the hockey team was sold a few months ago to Boston financier Jeffrey Vinik.
Oddly enough, Mr. Barrie and Mr. Koules were the first owners to be investigated by the NHL under the new, tougher due-diligence promised by commissioner Gary Bettman and deputy commissioner Bill Daly. The promise was made following the most recent NHL ownership scandal, when William (Boots) Del Biaggio fraudulently bought a share of the Nashville Predators. In court filings, HSBC officials said Mr. Barrie and Bear Mountain started defaulting on loans in 2008, the same year he bought into the Lightning.