Bamfield businessman given chance to pay up
Dec 07 2011
Businessman Jack Purdy has been given bankruptcy protection by an Alberta court so he can come up with a plan to pay off creditors.
Restructuring of his 15 B.C. and Alberta companies will be supervised by the company Alvarez and Marsal. Purdy will probably have to sell some properties to pay debts, said his lawyer Conan Taylor of Edmonton.
"The plan now is to put together a viable arrangement and it will involve liquidation of some properties," Taylor said.
Purdy owns numerous dilapidated and derelict properties in the picturesque fishing community of Bamfield on the west coast of Vancouver Island. He also owns properties in Port Alberni.
Purdy started buying properties in Bamfield about 13 years ago, but did not operate the businesses and, when development plans were not approved, he allowed high-profile buildings such as the Bamfield Inn to fall into disrepair, adversely affecting the economy of the small community.
Purdy was to appear in court last Friday on a personal bankruptcy petition brought by Alberta businessman Orest Rusnak.
However, the previous day, the bankruptcy protection order was granted allowing him to sell assets and pay corporate creditors.
On Friday, the court was told Purdy would make a proposal to creditors to settle his personal debts.
"This gives an opportunity to put together something without having to deal with a constant barrage of challenges by some very determined litigants," Taylor said.
Overseas properties, such as those in Anguilla and the Dominican Republic, will not be involved in the restructuring, he said.
Purdy's corporate and personal debt amounts to about $13 million, but the court agreed with evidence that his assets are likely in excess of $30 million, Taylor said.
The protection initially runs for 30 days, but Taylor will be asking for an extension. If there were insufficient assets to pay debts, Purdy would be declared bankrupt and creditors would receive a percentage payout.
It is not known whether the Bamfield properties will be considered for sale.
"He has a great love for that community and his dream was a sustainable ecotourism resort," Taylor said.
"But if someone wants to offer a whole bunch of money for the Bamfield properties, I suspect a variety of options would be considered."
Allan MacMullin of Edmonton, who claims he is owed $8.5 million by Purdy, said he believes more creditors will now be identified.
"I believe everyone will eventually be paid out, but people have to come forward," he said.
The loss of the $8.5 million, which involved a deal over Westridge Park Golf Club, near Edmonton, has been devastating, MacMullin said.
"It has caused a tremendous amount of grief."