The owners of the Medicine Hat Lodge were placed in receivership this week after failing to secure a refinancing agreement. The south-side hotel and Camrose Casino are now being operated by the court-appointed receiver, Ernst and Young.--News Photo Collin Gallant
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The Medicine Hat Lodge is in receivership after owner, Mayfield Investments, failed to gain new financing ahead of a deadline last month and failed to have the receivership order stayed in court.
Court-appointed receiver Ernst and Young took over operations at the hotel in south Medicine Hat last week, and will now determine how to best satisfy debts owed to the Alberta Treasury Branch and others.
That could involve a sale of assets, which include the Lodge building on Dunmore Road, a casino in Camrose and shares in the Copper Coulee Casino, located in the Lodge.
That local arrangement will likely mean little immediate change at the casino in Medicine Hat, though the receivership process could ease the way to a parting of Mayfield from local ownership, which has long talked about relocation.
“I’d be very interested in the opportunity to acquire those shares, but this is a very fluid situation,” said Albert Stark, who became a large shareholder about six years ago after a legal dispute between Mayfield, former owner Casino By Vanshaw, Stark and Canalta Hotels.
The latter two parties had pushed for relocating to a new facility in the Box Springs Business Park, partly controlled by Stark, but the three remaining owners agreed to a seven-year lease at the Lodge in 2019.
Stark said a new stand-alone facility is still his preference, and design work is advanced, but it is too early in Mayfield’s restructuring or receivership process to be more definitive.
The restructuring process was described to staff at the hotel in letters last week, the News has been told.
The facility, with a 400-person ballroom, has been central event space in Medicine Hat for nearly 40 years, and had been owned since 1990 by Mayfield, then an expanding hospitality company that also promoted dinner theatre.
Last June, ATB made the initial application against Edmonton-based Mayfield and a number of related companies, but in September a Court of King’s Bench hearing heard the two sides had come to an extension agreement allowing Mayfield to seek out alternate financing from another bank.
When that did not materialize by an Oct. 15 deadline, ATB applied to remove the stay on the receivership application, and restructuring firm Ernst and Young was assigned responsibility for the company’s business decisions.
Lawyers for ATB told court in September their clients are owed $38 million stemming from a 2021 arrangement. A list detailing other creditors is not yet available.
Other debt includes monies owed to the Camrose Agricultural Society for loans to Mayfield for its Camrose Casino.
That will continue to operate under a provisional licence under Ernst and Young management, according to media reports.
No immediate changes are expected at the Copper Coulee Casino.
“It’s business as usual for customers, though they (Ernst and Young) might have the right to participate,” said Stark, noting the receiver will be given full access to financial data and other shareholder rights when they evaluate the business.
In 2017, a dispute between Mayfield and the local casino ownership group, then known as Casino by Vanshaw, became public as the two sides disputed lease payments among other governance issues involved in the partnership.
The result was a takeover of Vanshaw shares by Canalta Hotels and local businessman Stark, with Mayfield remaining a minority shareholder, and the two sides coming to a new long-term lease agreement.
Mayfield’s stake in the casino was stated as 20 per cent in court documents in the original dispute.
The Lodge was built in 1985 by Hat Developments, but as that entity went into receivership in 1990, it was sold in a court-approved sale to Mayfield Investments for an undisclosed price.
