By Collin Gallant on March 15, 2018.
Alberta gaming regulators say they have no concerns over the current operations at Casino by Vanshaw.
However, while it is not believed to be in financial distress, court documents filed last November suggest, at that time, it was close to defaulting on debts as new investors vied for control of the company.
The News broke the story last week that well-known local businessman Albert Stark and Canalta Hotels president Cam Christianson had taken a majority stake in Vanshaw Enterprises last summer.
Their application to an Edmonton court in November asked to certify their control and bar company founder Kevin Van Der Kooy from “interfering” in day-to-day operations.
Stark’s affidavit states the partners became concerned but had taken steps to pay employees and suppliers, and after bringing in a new financial controller, have stabilized operations.
“The casino has a valid licence and is running as it should,” reads a statement sent on Wednesday from Alberta Gaming and Liquor Commission officials.
“We have no further concerns at this time.”
None of the allegations in the court proceedings have been proven.
Both Stark and Christianson are currently out of the country, according to their offices, and are unavailable for comment.
Van Der Kooy has not returned a message asking for further comment.
AGLC officials said this week the court action, while considered an “interim receivership,” does not involve the threat of bankruptcy, only a request for a third-party audit.
In July, the AGLC amended Vanshaw’s gaming licence to note the change in Vanshaw Enterprises’ ownership, effectively making a numbered company owned by Stark and Christianson the casino operator.
An affidavit from Van Der Kooy argues he attempted to invoke an escape clause to revoke his share sales agreement with Stark and Christianson.
The status of the case is not known.
Documents filed in Edmonton court in November state accountants found there was a “serious cash flow shortage” that month and obligations, including rent at both the Medicine Hat Lodge and Southside Events Centre, might not be met.
That took place 11 months after Van Der Kooy began planning a move to the Southside Event Centre after a legal dispute over rent at the casino resulted in the doors being locked at the Lodge location for several days in early 2017.
Stark’s affidavit states he and Christianson provided $3.5 million in loans and direct investment to Vanshaw Enterprises, leading to a share purchase.
That, he said, was to advance talks about eventually relocating the casino to the Box Springs Business Park, where Stark is an investor and Christianson’s company owns a hotel and has plans to build a second.
They argue Van Der Kooy obscured the financial position of Vanshaw and they found unstated liabilities, a potential penalty of nearly $3 million if the lease with the Lodge was broken early, money owed to layers and an overdrawn account with ATB Financial.
Van Der Kooy argues in court filings that Stark, Christianson and their managers were attempting a hostile takeover of his company and were damaging its reputation.