An application to stay a receivership order of Mayfield Investments Ltd., a company that owns multiple businesses in Alberta including the Camrose Resort and Casino, Medicine Hat Lodge and Calgary’s Stage West Dinner Theatre, has been denied by the court.
The Alberta Court of King’s Bench released the decision to the public last week, saying the company has been “in financial distress” since March 2021.
“It continues to be insolvent, although Mayfield argues it is on the eve of solvency,” the decision, written by Justice M.A. Marion, read.
Following its initial default, Mayfield, represented by Howard Pechet, signed a credit arrangement with ATB Financial on June 29, 2022.
The court said “there were further defaults,” leading to three more amended agreements aimed at settling the debt.
ATB demanded Mayfield repay its loan on Aug. 29, 2023, and delivered a formal demand letter approximately four months later.
“ATB demanded repayment of Mayfield’s indebtedness, plus all accrued and accruing interest, standby fees, costs, prepayment fees, and expenses,” the court said.
Following negotiations, ATB and Mayfield entered into another amended agreement and Mayfield attempted to sell its properties in February, but “failed to generate any proposal sufficient to repay the indebtedness to ATB.”
According to the terms of its latest agreement, Mayfield was ordered to deliver an unconditional commitment letter from the Canadian Western Bank (CWB) to ATB.
The court said that letter has yet to be delivered and, as of Oct. 24, Mayfield is more than $38.8 million in debt.
At that time, a lender’s certificate was filed and a receiver was ordered to file a report.
Four days later, after meeting with Mayfield’s vice-president of operations, general managers and employees, inspecting some of its properties, meeting with representatives of Alberta Gaming, Liquor and Cannabis (AGLC), working on operational procedures and reviewing insurance, the receiver informed all Mayfield employees.
“(The report included) the receiver’s intention to, among other things, continue operating Mayfield’s business without interpretation, to maintain the employment of all current Mayfield employees and to determine the most appropriate sales strategy for Mayfield’s assets.”
It also recommended restrictions on the company’s fund outflow, an onsite presence at the Medicine Hat Lodge and Camrose Resort and Casino and termination of the employment of Mayfield’s president Jason Pechet.
Calgary’s Stage West Dinner Theatre, according to its website, was established in 1982 and is Alberta’s second longest-running dinner theatre. Its parent company, Mayfield Investments Ltd., is more than $38 million in debt as of Oct. 24, 2024. (Supplied/Facebook)
Mayfield claims ‘irreparable harm’
In its application to the court of a stay of receivership, Mayfield said its assets would “be irreversibly disposed of, with little recourse” and would decrease the value of its business.
However, Justice Marion agreed with ATB, saying the company failed to prove that.
“The receiver has taken steps to work with AGLC to ensure a smooth transition and has been granted a temporary casino facility licence for the Camrose Resort and Casino until January 22, 2025,” Marion said.
“The receiver’s opinion is that cash levels, of at least some of the businesses, are insufficient to maintain business operations and meet critical expenditures and has been advised by Mayfield’s vice-president of operations that Mayfield was forecast to have insufficient funds, without a cash injection, to operate beyond Nov. 1, 2024.”
ATB also said that Mayfield does not have a strategy to repay its debts.
“Mayfield has been advising ATB (since June 2024) and the court (since at least August 2024), that a CWB refinancing is forthcoming or imminent.
“The evidence now before the court illustrates that CWB has not yet provided credit approval (let alone executed a CWB commitment letter), and Mayfield’s 2023 financial statements are still being prepared or, at best, have only very recently been provided to CWB.”
Justice Marion also said that the receivership proceedings have progressed too far for an additional stay to be reasonable.
“The stay has been terminated, the receiver has already been appointed and activated, and the receiver has been diligently pursuing its mandate since Oct. 24,” Marion said.
“It has already communicated with employees about the receivership, terminated Mayfield’s president, taken possession and control of Mayfield’s assets and started working on financial and interim borrowing plans.
“ATB argues that the egg cannot be unscrambled now. I find that, while the egg may not be fully scrambled at this point, it has been cracked and is already bubbling on the griddle.”
Marion said granting Mayfield’s request for an additional stay, “to try and put the egg back together,” may cause confusion and unintended consequences.
CTV News has reached out to Stage West Dinner Theatre, one of the businesses owned by Mayfield, for comment.
Representatives of the long-running entertainment venue forwarded the request to Mayfield.
Last week, AGLC said it issued an interim licence to the reciever to allow the Camrose Resort and Casino to continue operations. The agency also recently approved an application to move the business from its current location to southeast Edmonton.
According to court documents, Mayfield indirectly employs more than 450 people.