This unexpected development has led to the property going into receivership, raising questions regarding its prospects amidst a challenging market
An official decision by an Alberta court ordered Camrose Casino into receivership last Thursday due to unpaid debts. This development follows two previous forbearance agreements earlier in the year, marking a critical moment as the casino failed to meet several default criteria, leading to Ernst and Young’s appointment as the receiver.
A Final Effort to Stabilize the Company
Receivership represents a final effort to save a company from bankruptcy, setting up a trustee to manage the company, initiating restructuring efforts, and, hopefully, enabling a return to profitability to repay any outstanding debt. According to a recent Edmonton Journal report, the move also grants Ernst and Young control over Mayfield Investments Ltd., the casino’s owner.
Howard Pechet, president of Mayfield Investments Ltd., noted that Mayfield has had decades of solid financial reputation. Pechet said he was hopeful about the court reversing its decision, but the consequences of receivership provide an uncertain future for the company and the casino’s pending relocation approval.
We’re all a little flummoxed by this.
Howard Pechet, Mayfield Investments Ltd. president
The receivership empowers Ernst and Young to handle business operations, assets, and properties associated with Mayfield Investments, such as controlling shares in the Camrose Casino Corp. and Fort Nelson Hotel, as well as various partnerships like the Medicine Hat Lodge that form the core of the company’s operations.
Camrose Casino Faces Significant Challenges
The court ordered the receivership due to Mayfield’s failure to provide certain documentation, such as a commitment letter from Canadian Western Bank (CWB) and a finalized repayment plan for remaining debts. Other unmet criteria included missing account statements, delayed sale proposals, and inadequate biweekly reconciliations of payable accounts.
Adding complexity, the Camrose Regional Exhibition (CRE), a longstanding creditor, claims that Mayfield has defaulted on a $2.5 million loan granted in 2006 to support casino construction. CRE’s executive director, Dianne Kohler, stated that the outstanding debt currently stands at $1.8 million. If true, these additional liabilities could significantly impact the venue’s prospects.
Camrose Casino’s recent approval from Alberta Gaming Liquor and Cannabis (AGLC) to relocate to Edmonton adds another dimension to the casino’s ongoing turmoil. The move caused backlash from CRE and raised concerns that such a high-profile establishment could disrupt the local gaming sector. Pechet did not comment on how the receivership would affect the relocation plans as the fate of Camrose Casino hangs in the balance.
