A flurry of court filings between the two controlling partners of Bear Mountain is creating uncertainty for the future operation of the 1,100-acre resort community.
Sanovest Holdings Ltd., which holds a $62-million loan on the Bear Mountain lands in Langford and the Highlands, has asked B.C. Supreme Court to appoint a receiver after Ecoasis Developments LLP failed to pay off the loan in full by May 1.
Sanovest has asked for a receivership to preserve its assets and ensure fair treatment among creditors, citing a “breakdown in trust between the parties,” according to a petition to the court. Ecoasis and 14 other associated companies are listed as respondents.
Dan Matthews, president and chief executive of Ecoasis Developments, and Tian Kusumoto, director at Sanovest Holdings Ltd. have been at odds since 2021 and involved in ongoing litigation over the operation and the sale of raw land since last year. Each have 50% ownership in the Bear Mountain Partnership.
Matthews said Sanovest issued a formal demand for payment of the loan and then refused Matthews’ cash offer to buy out Sanovest’s 50% interest in the Bear Mountain partnership.
In response, Ecoasis applied to B.C. Supreme Court on May 10 to appoint a marketing agent and to approve the sale of about 10% of its land holdings at Bear Mountain — the proceeds of which would “fully retire the debt associated with Bear Mountain.”
In a lawsuit filed last June, Matthews claims Kusumoto, who took over a partnership role from his father, Tom, in 2021, has been “attempting to seize control” of the company’s bank accounts and operation of the company, and has been deliberately blocking land sales “of unprecedented value” that would have easily paid off the loan.
In a court petition, filed the same day as the lawsuit, 599315 B.C. Ltd., which is headed by Matthews, claims Kusumoto advanced a new goal for the Bear Mountain development that runs contrary to the original goal.
“Kusumoto has sought to radically alter the business objectives by seeking to involve the partnership in vertical building partnerships with developers rather than pursue the established plan of bulk sales of multi-family sites and single-family residential lots,” the petition says.
Matthews alleges Kusumoto’s actions are threatening the “operational integrity” of Bear Mountain.
In the latest filing, Matthews is asking the court to appoint a marketing agent to sell some Bear Mountain land parcels that would retire the loan, pay property taxes and meet other mounting expenses related to the development.
Bear Mountain includes two 18-hole golf courses, tennis courts and trails. It has about 775 acres of undeveloped lands. Hundreds of homes have been built over the years on property spread over Skirt Mountain.
In its petition for a receiver, Sanovest said the lease for the golf courses is critical to operations and revenue and the lease expires on June 30 with “no viable strategy to extend that lease or replace the services it provides.”
Matthews said none of the operations or homeowners at Bear Mountain are affected by the legal proceedings.
In a separate statement Tuesday, Westin Bear Mountain Resort and Spa clarified it is an independent entity and not associated with any of the companies at Bear Mountain, and it’s business as usual.
Another company, One Bear Mountain, said it is an independent development by 360 Pacifica and Terracap that is a distinct and financially viable entity with no corporate or investor ties to Sanovest, Ecoasis Developments LLP and Ecoasis Resort and Golf LLP.
Matthews said in a statement on Tuesday that the Ecoasis court filings this month and last June are in response to the refusal of Sanovest to approve significant land sales that would have resulted in $164 million in revenue, which would have allowed the company to resume selling property and pay its bills.
“Unfortunately, Sanovest did not agree to the reasonable alternatives presented,” Matthews said. “Instead, Sanovest through its representative, Tian Kusumoto, has embarked on a harmful and unnecessary path to further its self-serving and oppressive agenda.”
Matthews said Bear Mountain’s resort operations remain profitable.
He said he is asking the court to approve the sale of select sites at Bear Mountain to retire the debt. “I believe it is in the best interests of the company, our valued staff and the community of Bear Mountain.”
On May 3, Sanovest issued a formal demand for payment of its $62.3-million loan, and Ecoasis claims the interest continues to build at a rate of $13,560 a day. Sanovest said the partnerships’ last loan payment was last July.
In addition to the Sanovest loan, Ecoasis is facing a $1.886-million lawsuit by the City of Langford for a portion of the cost of the Bear Mountain Parkway, an estimated $1.65 million in property taxes payable by July 1, about $100,000 per month in basic operating expenses and about $2 million in other expenses.
The only source of revenue for the partnership is coming from golf and recreation operations, according to the filings. “While this cash flow can sustain the golf and recreation operations on their own, it falls below what is necessary to sustain operations as a whole,” the court documents say.
The lawsuit alleges Kusumoto interfered with a sales and marketing plan by Colliers International in June 2021 for Bear Mountain properties, seeking higher prices from buyers than what was already offered. The documents say Colliers warned that refusal to engage with purchase candidates “risked reputational damage in the investor/developer community by creating the perception that the partnership was not a serious vendor.”
Matthews’ application to the court said that while he’s sought alternative funding from financial institutions, the company can’t obtain reasonable refinancing while Kusumoto continues to block the sale of land.
Sanovest said in its court filing that while both sides agree Bear Mountain has significant value in the lands it owns, they “disagree on on the appropriate strategy to realize on that value.”
Sanovest does not agree with Matthews’ application to subdivide, bundle and sell properties. It is seeking the receivership order to conduct a more transparent process, the court filing said.
It isn’t known when B.C. Supreme Court will make decisions on the applications.
>>> To comment on this article, write a letter to the editor: [email protected]
