The monitor overseeing the court-ordered restructuring and wind-down of the League Group of Companies has written cheques to a number of unsecured creditors and former employees of the property- development company.
PricewaterhouseCoopers, which has been overseeing the proceedings since League applied for court protection under the Companies Creditors Arrangement Act in October 2013, paid a total of $1.375 million to 160 unsecured creditors — less than 10 per cent of what that group was owed — and $68,189 was distributed to 42 former employees.
The payments are the latest step in wiping League from the record books.
In December, the monitor reported that of the total recovery of $210 million from the sale of what was left of League’s assets, about $200 million has been paid to stakeholders, including $181 million to secured mortgage holders.
But most of League’s 4,280 investors, who pumped $370 million into various investment schemes, will get little of their investment back.
According to the monitor, all investors in a loss position will automatically be included in a class action suit against the insurance company that backed League’s directors, officers and trustees.
But those insurance policies offer just over $20 million in coverage.
The monitor has estimated individual investors will receive on average about eight cents on the dollar if those policies pay out.
According to PricewaterhouseCoopers, investors holding secured notes, unsecured investor notes and equity investments have been paid about $9.2 million so far, and are due to split another $6.9 million, about four per cent of the $370 million invested.
The two-phase wind-down approved by the courts will see League close most of its 170 corporations by the end of April.
The second phase will include selling League’s final property asset, pursuing money owed from another property and fighting for the insurance money. That could take as long as two years.
The monitor has placed the blame for the financial mess on League founders Adam Gant and Emanuel Arruda, noting in the reports that their lack of experience and knowledge of the sector led to them being in over their heads.
Gant, who was forced to resign as League‘s chief executive by the courts in November 2013, is now an adviser at REAfe, which appears to be a real estate consultancy business.
His personal real estate dealings have also made news. His West Saanich Road home is on the market in a court-ordered sale after he defaulted on his mortgage. The Bank of Nova Scotia foreclosed in April last year after it appears Gant stopped making mortgage and property-tax payments.
Gant defaulted owing the bank $3.63 million plus interest and the bank secured the right to sell in November. The 2011 home on 13.4 acres at 7566 West Saanich Rd. looking out on the Saanich Inlet has four bedrooms and three bathrooms over 4,000 square feet. The home, listed for $4.2 million, is sitting on farm land and was last assessed at $1.09 million, down from $1.189 a year ago.
