The unwinding of $144-million in debt amassed by former child actor Robby Clark’s companies comes after attempts to market the properties as a package failed
In June, court-appointed monitor KSV Restructuring Inc. released a court-ordered report into the preinsolvency conduct of former child actor Robby Clark ’s companies, finding millions in spending was 'unjustifiable' and 'accelerated the applicants’ liquidity crisis that resulted in these CCAA proceedings.
On Sept. 20, first-ranking lenders like Mr. Lindstrom faced a deadline to make what’s known as a “credit bid” to take over ownership of Balboa homes they loaned money against. The credit bid allows lenders to convert, for example, a $125,000 mortgage they are owed into ownership of a home with an appraised value of perhaps $150,000.
“Part of my DIP fees of $58,000 was almost $30,000 in renovations,” said Cathy Hugh, a private lender who has raised questions about KSV-approved spending on renovations that Mr. Clark’s company, SID Management, was tasked to perform, even as allegations about misappropriation of lender funds and contractor cost inflation were swirling around Balboa.
Not every property is eligible to join the BNC syndicate though, according to corporate counsel Geoff Rabideau. The KSV pool is also the only proposal that offers any chance of repayment for the unsecured promissory note lenders – who are sitting on $54-million of virtually worthless personal guarantees. Many of these promissory note holders have sent out e-mails advocating for the pool option.
The Listing Noastack Property Lender Company Value Properties Ownership Lenders Mortgage Robby Clark Geoff Rabideau Balboa
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