A A

BEN EOIN, N.S. —

The Cape Breton Ski Club has filed an injunction in Nova Scotia Supreme Court to halt the sale of The Lakes golf club to the Ben Eoin Development Group Inc.

Heavily indebted, Ben Eoin Golf Club Ltd., which operates The Lakes, reached an agreement in February with the development group for it to take over the club’s assets and liabilities.

The Lakes shareholders voted 96.8 per cent in favour of the deal on Feb. 5. An initial vote to accept the proposal was rejected on Dec. 16.

The transfer of ownership of the golf course was in the best interest of shareholders, Ben Eoin Golf board of directors president Coleen Moore-Hayes said Friday.

“The debt was just insurmountable,” she said in a phone interview from Haines City, Fla.

She said the partners in the Ben Eoin Development Group were also shareholders in The Lakes golf course and were well aware of the state of the club’s finances.

The Ben Eoin Development Group partners listed on the Nova Scotia Registry of Joint Stock Companies are president/secretary Rodney Colbourne and directors Mike Kenny, Troy Wilson, Steve MacDougall, Siva Thanamayooran and Glen Brann.

Along with a mortgage, operating budget and maintaining expensive golf course equipment, the golf club had to start paying down on its 10-year, $3.5-million loan from the Atlantic Canada Opportunities Agency.

The repayment schedule to ACOA amounted to 45 per cent of the golf club’s profit over the run of a fiscal year, Moore-Hayes said.

“We wrote our first cheque and now I’m getting ready to write our second one because … this is not a forgivable debt,” she said.

“I can assure you we’ve spoken to every person we thought who could help us, politically and otherwise. It’s understandable. It’s our debt and that is the terms of the debt.”

The ski club, a non-profit society which owns and operates Ski Ben Eoin, said it adopted a memorandum of understanding with Ben Eoin Golf in 2006 as a go-forward agreement for both entities.

In its application filed with the Supreme Court, the ski club, represented by Halifax law firm Cox and Palmer, stated that in the MOU the ski hill has the right of first refusal to purchase the golf course if its ownership structure changed.

Under a revised section in the MOU from June 2006, it stated in part: “Ben Eoin Golf will provide Cape Breton Ski Club, or vice versa, a right of first refusal to acquire the shares and/or assets of BEG, or the CBSI, in the event that reorganization is required that would materially change ownership of either entity.”

Moore-Hayes disputed the MOU provided for a first right of refusal clause for the ski club.

“It’s never been signed, it’s never been ratified regarding first right of refusal,” she said.

“There was a document that, in fact, became the lease. There’s four of these documents floating around out there and the only one that was ever signed was the actual lease document.

“We think that’s the document they refer to. We think there’s no such right (of first refusal) that exists.”

The ski club also pointed to the “intertwined nature” of the ski club and the golf course properties.

“…The Ski Club and Golf Club entered into two agreements, the MOU and the Lease, which created highly intertwined operations,” it reads. “For instance, a central portion of the golf course is on land leased from the Ski Club, and the Ski Club operates a ski run over land owned by the Golf Club.”

In January, the then-president of the Cape Breton Ski Club, Ann Terese Doucette, requested the golf club’s financial information, valuation of the club’s shares and the name of the potential buyer of The Lakes.

A day after shareholders voted heavily in favour of transferring ownership of the golf club to the Ben Eoin Development Group, Doucette wrote to the Ben Eoin Golf Club indicating its plan to exercise the ski club’s option to purchase the golf course with a 60-day closing period.

“The Ski Club were prepared to offer the same terms, as they understood them, as what the Development Group was offering,” the court document reads.

The golf club responded in a letter on Feb. 11 asking for the ski club to pay for legal services in order for Ben Eoin Golf to review the option from the Cape Breton Ski Club. That ask was declined by the ski club, which wanted the golf club to either accept its offer or delay the transfer of operations to the development group pending negotiations with the ski club.

No further communication between the parties have taken place, according to the ski club.

The injunction hearing is currently scheduled for a Sydney court room on May 16-17.

Calls made by the Post to the Cape Breton Ski Club’s board president J. Vern MacDonald were not returned by deadline.

The Post was also unsuccessful in reaching Rodney Colbourne of the Ben Eoin Development Group for comment Friday.

The Ben Eoin Development Group is already spending money on extensive multi-million-dollar renovations to its hotel, The Birches at Ben Eoin Country Inn, next to the ski hill, to house the golf club’s pro shop and a dining room.

“There’s a lot of cash involved in this,” said Moore-Hayes.

“A huge improvement plan … will give us a clubhouse, proper locker rooms, carts that are safe to drive on the hills.”

The development group has also purchased the lands at the Ben Eoin Marina and an undeveloped residential subdivision near the golf course in hopes of transforming the area into a four-season recreation destination.

chris.shannon@cbpost.com

Twitter: @cbpost_chris