The Carriage Ridge and Carriage Hills timeshare resorts in Oro-Medonte's Horseshoe Valley have a buyer, a court was told during a hearing broadcast over YouTube on Friday.
Details of the deal are contained in a sealed document filed with the Superior Court of Justice and will remain confidential until a court-approved sale is closed, which is expected to occur by June 26.
“We want to close the transaction as soon as possible,” said lawyer Sanjeev Mitra, who is representing the receiver, BDO Canada.
Just how the Oro-Medonte Township property, located north of Barrie, will be used and whether the existing buildings will remain was not revealed.
However, Mitra did tell the court he thought the best use of the resorts is to turn them into condominiums. The proposed purchaser is “a significant player” in the business of hotels and condominiums, he added.
Around 11,400 individual members own a total of 17,408 “intervals” in the two properties on a total of 28 acres sitting atop the Horseshoe ski resort and across the Third Concession from a Finnish spa, which is under construction.
Wyndham Destinations, which was managing the property until it closed in January, owns 1,581 of the intervals in the two resorts.
Carriage Ridge has 78 units within three buildings on eight acres, and Carriage Hills has 172 units in eight buildings on 20 acres running independently from Horseshoe Resort.
Many of the 700 viewers of Friday’s virtual hearing participated in a chat running concurrently with the hearing and appeared to be those timeshare owners.
Among their concerns, added lawyer Sam Babe, is whether they will be obligated to the buyer if the intention is to run a timeshare resort.
“We’ve told them — and we’ll tell them again for those who are listening — that the existing member owners of these two resorts are not in any way going to be obligated to the purchaser of these resorts,” he said.
The financial burden of the timeshares and the owners’ inability to sell them led to the liquidation process, which began last year. It was estimated that one-quarter of the owners were delinquent, meaning they had essentially abandoned their interest and stopped paying fees.
The boards on the timeshares hired BDO Canada as administrator in a court process to determine how to proceed, given the resorts were struggling each year to meet their spending targets with an escalating number of owners defaulting in their membership fees.
A survey circulated among the owners concluded the majority wanted to exit their agreement, so the decision was made to sell the property.
When buying into the resorts, which were developed in the 1990s, the owners agreed to ownership in perpetuity, meaning they had to retain their interest unless they sold it. But buyers were scarce to non-existent. Many of the older members were concerned family members would end up inheriting that responsibility in their estate.
The owners were told Friday that their claim on the property would be attached to the proceeds of the sale, which will be distributed according to a court order.
Meanwhile, the liquidation process included attempts to track down the approximately 2,500 delinquent owners. They were asked to pay their outstanding debts in exchange for a break on costs related to the overall process.
Once paid up, they would be included with the owners receiving a portion of the proceeds from the sales.
Court heard that has resulted in the collection of nearly $400,000 related to the Carriage Hills property and another $275,000 from delinquent Carriage Ridge owners.
That money is expected to go toward maintaining the property and associated costs until the sale closes.
The sales process, which began in January after the resorts ceased operating, attracted more than a dozen bids.
“Following a series of negotiations and back and forth, we ended up with about 14 people put in non-binding letters of intent,” Mitra told the court while presenting an overview of the marketing sales process.
The property was listed and marketed through Colliers International commercial real estate services. During the process, Mitra said Colliers was asked to ensure all bidders were qualified buyers, “someone with the resources to be able to close this transaction."
“We don’t really want to have to put this back on the market if we can avoid it," he added. "It would be a waste of cost and then we may have to turn to financing.”
The 14 bidders were asked for their best and highest price, as well as to comment on a proposed agreement of purchase and sale. That led to negotiations with a purchaser resulting in finalized terms on April 6.
There was concern about the access to the overall court process following the last hearing when members were given the wrong link and were unable to witness the process live.
Mitra announced Friday that his law firm, Aird & Berlis LLP, takes responsibility for that error and would deduct $10,000 from its fees as a result.
They are expected to make a sale approval motion to the court on May 27, leaving 30 days for an appeal period before the deal closes.