The bankruptcy and receivership proceedings of the Kootenay Columbia Seniors Housing Cooperative (KCSHC) are continuing to make their way through legal channels.
KCSHC originally filed for bankruptcy in November of 2014, and held their first meeting of creditors in December 2014. At the time of filing estimated assets were $3,558,200, while liabilities were $5,053,862 leaving a $1,495,662 deficit. G. Moroso & Associates Inc. was appointed as the trustee.
The original idea for the cooperative and what has become known as Grandview Heights was to build a multi-phase housing and residential care facility development that would be governed by a cooperative group in order to provide fee-simple single family building lots, strata multi-family housing and a residential seniors care facility.
Opinions vary as to what went wrong, but the economic downturn and lack of new investments seem to be contributing factors. Organizers also received feedback that many seniors would rather rent than buy into a condo type of housing development. Meanwhile, too much time passed with interest accruing and no new revenue resulting in the inability to keep up with the mortgages on the property.
The next stage in scheduled proceedings is to appoint G. Moroso & Associates Inc. as the receiver, enabling them to begin selling properties including 14 lots along with some larger undeveloped tracts of land in order to recoup as much money as possible for the creditors. This process could take anywhere from a few months to a few years.
Heritage Credit Union is the first mortgagee and largest creditor with a claim of $1,832,700, followed by a group of about 50 KCSHS member loan holders who advanced funds to help with development costs. Their collective claim adds up to $2,273,000. Other creditors include Total Concept Developments, Martech Electrical, Marwest Industries and Selkirk Paving.
The property on which the existing Grandview Heights homes sit is already paid for and is not included in the claims. The actual homes are not included either, so none of the current residents will be losing their homes as a result of the proceedings.
Based on estimates of the sale price of the properties currently owned by KCSHC the likely outcome is that the Heritage Credit Union claim will be fulfilled, the claim of the member loan holders will only be partially paid out, and the remaining creditors will receive nothing.
Frustration and emotions are in abundance among the member loan holders who are seeing some of their retirement nest eggs disappear. Tensions have resulted in demands for a full accounting and outside audit of the financial reports, personal attacks and civil suits against trustees.
It is going to take a while for the bankruptcy proceedings to be completed, meanwhile KCSHC will continue managing the existing development and maybe someday cooperation will return to the cooperative.