A milestone was reached Friday by the Land Conservancy of B.C. when creditors voted in favour of a plan that would clear off its debts and allow it to survive.
“I can not tell you how relieved I am — 10 years of my life,” said Briony Penn, board member and former chairwoman of the board.
“It is done. It is now a new era.”
The vote was at the final meeting of creditors for the Victoria-based land trust, which has been under protection from creditors since October 2013. The organization has been working with a court-appointed monitor to help it find a way to continue.
The monitor will head to the Supreme Court of B.C. seeking approval for the plan. Provided that happens, the conservancy hopes to start sending cheques to creditors in early January.
The organization’s intention from the start was to protect its properties, pay creditors to the fullest extent possible, and ensure the conservancy is viable in the long term, executive director Cathy Armstrong said.
“We are incredibly grateful to our creditors for their patience throughout this process and their supportive vote today.”
The conservancy had debts totalling $8 million, including $4.3 million in secured debt and $3.6 million in unsecured debt.
Secured debt is backed by an asset. During this process, the organization has paid out $2.5 million in administration costs for the restructuring and monitoring.
An ambitious buying program, using mortgages to obtain properties, sent the organization into a financial tailspin. Monies dedicated to one cause were transferred to others. Canada Revenue Agency froze its accounts.
New management took on the challenge of trying to save the organization as the conservancy entered creditor protection.
It had owned 46 properties. Many were transferred to land trusts and sold to societies supporting a specific property. In the end, the group plans to own seven sites, including Abkhazi Garden in Victoria, Second Lake in the Highlands and Madrona Farm in Saanich.
Its focus now is to manage protective covenants for more than 200 properties around B.C.
Two votes were held at the two-hour Victoria meeting: one for secured and another for unsecured creditors. In each case, the organization was supported.
To pass, each category vote needed at least 51 per cent of the number of voters, plus at least two-thirds of the value of the total amount owed.
Under the plan, the three secured creditors, owed a total of $480,355, would be paid out, Armstrong said. Two of three secured creditors voted in favour, representing 78 per cent of the amount owed. Of the 99 votes cast by unsecured voters, 92 were in favour of the plan, with the value representing 74 per cent of the monies owed.
Everyone owed up to $5,000 would be paid the full amount.
The 55 creditors owed more than $5,000 would receive $5,000 plus 22.5 per cent of the balance. If $250,000 comes in under a proposed density swap in Victoria, that would boost the payout by about nine per cent, Armstrong said.
Included in the unsecured creditors were 39 former employees owed a total of $346,000. They were represented by the provincial employment standards branch.
An agreement was reached that the 22 former staffers owed $5,000 or less would be fully paid, Armstrong said.
The remaining 17 would receive what other unsecured creditors owed more than $5,000 would get.
The financial troubles caused heartache. One example is Jake Adams, son of the late Dr. Chrystal Kleiman, who bequeathed $707,000 to the conservancy that was to be used to support the Galiano Conservancy Association’s learning centre. Just $134,000 went to that centre.
It was “absolutely devastating” to learn that the bulk of that bequest did not go to the centre, Adams said in a statement.
“I am encouraged by the changes that they’ve made at the organizational level, and with their willingness to try to find a way to heal the wounds their predecessors have caused.”
Environmentalist Vicky Husband, an unsecured creditor owed $200,000, voted in favour of the plan.
Creditors were “courageous” to support the plan, she said. “They realized that we couldn’t carry on any longer like this.”
