A Calgary judge has extended a court order protecting the Medican group of companies from its creditors, and also approved the sale of a quarter section of land at Sylvan Lake that belongs to the financially troubled developer.
Medicine Hat-based Medican received an order under the Companies’ Creditors Arrangement Act on May 26 that prevents its creditors from taking action against it. On Thursday, that order was extended to Sept. 30.
As of July 30, Medican owed $226.8 million, including $64.7 million to unsecured creditors. Dozens of those unsecured creditors are in Central Alberta.
Medican is working on the first of three phases of Sierras Michener Hill in Red Deer, with a total of 148 condominiums and 38 duplexes planned; it’s completed the first building in the 169-unit Axxess Sylvan Lake condominium project; it owns the quarter section of undeveloped land east of Secondary Hwy 781 on Sylvan Lake’s southern outskirts; and it recently sold the Sylvan Lake Marina.
The Court of Queen’s Bench judge authorized the sale of the Sylvan Lake quarter to Lamont Lands Inc. — the company developing Ryders Ridge in town.
Lamont founder Gerry Lamont confirmed that his company will eventually develop the land, but is currently focused on Ryders Ridge.
“In a realistic time, I would say probably starting in about three years,” he said.
Although it’s too early to elaborate on the type of development that will occur there, Lamont said he doesn’t expect a commercial component like Ryders Ridge has.
“It really is a residential setting,” he said, noting that the parcel has a “natural beauty.”
Medican’s court-appointed monitor, RSM Richter, had also prepared an application for court approval of a refinancing deal for Sierras Michener Hill.
The resulting money was to be used to pay the existing lenders and the creditors involved in the project. But the notice of motion has been put over until later this month.
RSM Richter’s most recent report, filed on Tuesday, said that Medican has pre-sold 39 of the 52 units in Phase 1 of Sierras Michener Hill. It added that efforts are being made to sell the second and third phases of Axxess to another developer.
RSM Richter also said it is reviewing the sale of the Sylvan Lake Marina, which is earmarked for a single-phase condominium project, to ensure that the April transaction was for fair market value. The buyer was a numbered company.
Medican was involved in more than 30 projects, some as developer and others as a contract builder. Founded in 1974 as a concrete company, Medican has constructed more than 10,000 homes in Western Canada.