KELOWNA – The courts have shot down the first attempt by the receiver to sell a high-profile, bankrupt development project in Kelowna.
Ernst & Young was proposing to sell Sopa Square to the Vancouver based Aquilini Investment Group for $29.5 million unless a higher bid is received.
The Aquilini offer would pay off the major lenders and property taxes of about $275,000 owed to the City of Kelowna. But Sopa Square’s local contractors, suppliers and 36 initial investors would receive little, or none, of the $5.5 million they are owed.
A judge agreed with those creditors that the receiver has done an inadequate job of trying to sell Sopa Square and so the proposed deal with the Aquilini group was denied.
Mr. Justice Gary P. Weatherill wrote in his decision: “No course of action other than a stalking horse bidding process appears to have been considered, including the traditional tendering process. There is no evidence that the Receiver has attempted to market the Development beyond discussions with three developers. There is no evidence regarding the extent to which the Receiver attempted to identify other developers who might be interested in bidding through a stalking horse bid.”
As well, the judge noted the appraisals of the development are dated, saying: “I am not satisfied that the appraisals accurately reflect the current value of the Development.”
The judge’s ruling means Ernst & Young has to renew its efforts to market Sopa Square to a new developer. The Pandosy Street development encompasses retail outlets, office space and a proposed residential tower.
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