Walton Edgemont Development Corporation - Stakeholder Update

CALGARY, July 11, 2018 /CNW/ - On June 26, 2018, the Court of Queen's Bench of Alberta (the "Court") granted an order extending the stay of proceedings against Walton Edgemont Development Corporation (the "Corporation") to October 31, 2018 (the "Stay Extension").

The Corporation was launched in 2011 to provide investors with the opportunity to participate in the acquisition and development of the approximately 201.5 acres comprising the "Edgemont" properties located in southwest Edmonton, Alberta.

The Corporation, together with certain affiliates, voluntarily filed and obtained creditor protection under the Companies' Creditors Arrangement Act ("CCAA") pursuant to an initial order granted by the Court Queen's Bench of Alberta on April 28, 2017. Ernst & Young Inc. (the "Monitor") was appointed as the Monitor of the Corporation pursuant to the Initial Order.

Information regarding the significant activities undertaken by the Corporation during its proceedings under the CCAA including the sale of approximately 123.4 acres to Rohit Communities Inc. and enhancement of Ernst & Young Inc.'s powers as Court-appointed Monitor, are available online at www.sedar.com under the Corporation's profile. Copies of documents and additional information regarding the CCAA proceedings for the Corporation are available on the Monitor's website at www.ey.com/ca/wigi.

On April 20, 2018, the Court granted an Order enhancing the Monitor's powers over the Corporation. Furthermore, on June 8, 2018, a distribution protocol (the "Distribution Protocol") was established for the Corporation pursuant to an order of the Court whereby the Monitor is authorized, amongst other things, to distribute net recoveries from the monetization of the Corporation's property to its stakeholders.

The Stay Extension will permit the Corporation to continue to complete the remaining development with the goal of distributing net recoveries to the Corporation's stakeholders in accordance with the Distribution Protocol. 

Key tasks, objectives and initiatives for the Corporation to complete include:

• Completing all construction and maintenance obligations in previously constructed Phase 1 and offsite infrastructure including 199^th Street and the Edgemont Neighborhood Sanitary Lift Station to obtain Final Acceptance Certificates and release of cash secured letters of credit from the City of Edmonton; and
• Collection of all recoverable amounts owing for previously constructed infrastructure.

It is anticipated that the work outlined above will take approximately five to eight years to complete. 

Based on the Corporation's reasonable best estimate of construction costs, receipt of recoverable amounts and release of cash secured letters of credit, it is anticipated that proven claims against the Corporation will be satisfied in full and holders of Class B non-voting common shares in the capital of the Corporation are expected to receive a recovery of between 30% and 40% on the original purchase of $10.00 per share.  Should the expenses and receivables deviate from the current projections, the resulting recovery per Unit could be outside of the aforementioned range.

The Monitor will post a report on its website (www.ey.com/ca/wigi) within 150 days from the end of each fiscal year, providing the following information with respect to the Corporation (i) a statement of receipts and disbursements, (ii) a summary of all proceeds realized by the Corporation during the fiscal year; (iii) a summary of all distributions of proceeds; and (iv) a summary of the use by the Corporation of the administrative reserve established pursuant to the Distribution Protocol.

On May 16, 2018, the Alberta Securities Commission issued a cease trade order ("CTO") (also evidencing a decision of the Ontario Securities Commission) prohibiting all trading of securities of the Corporation, as a result of the Corporation's failure to file annual audited financial statements, annual management's discussion and analysis and certification of the annual filings for the year ended December 31, 2017. The CTO further provides that, despite the prohibition on trading, a beneficial security holder of the Corporation who is not, and was not at the date of the CTO, an insider or control person of the Corporation, may sell securities of the Corporation acquired before the date of the CTO if both of the following apply: (a) the sale is made through a "foreign organized regulated market", as defined in section 1.1 of the Universal Market Integrity Rules of the Investment Industry Regulatory Organization of Canada; and (b) the sale is made through an investment dealer registered in a jurisdiction of Canada in accordance with applicable securities legislation. Having regard to the Distribution Protocol and the intent to maximize recoveries to the Corporation's stakeholders through a distribution to stakeholders, the Corporation does not anticipate incurring the expenses required to prepare and file the noted financial statements or to seek to revoke the CTO.

Forward-looking information

Certain statements contained in this News Release constitute forward-looking statements. These statements relate to future events or the Corporation's future performance. All statements, other than statements of historical fact, may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate," "expects," "intends" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this News Release not be unduly relied upon by investors as actual results may vary materially from such forward-looking statements. These statements speak only as of the date of this news release and are expressly qualified, in their entirety, by this cautionary statement.

In particular, this News Release contains forward-looking statements pertaining to: the anticipated objectives and initiatives for the Corporation to complete pursuant to the Distribution Protocol; estimate of construction costs, receipt of recoverable amounts and release of cash secured letters of credit; and expected recoveries to claimholders and shareholders of the Corporation.

With respect to the forward-looking statements listed above and contained in this news release, the Corporation has made assumptions regarding, among other things: the Corporation's ability to complete the proposed Distribution Protocol as intended, and the realization of anticipated proceeds in connection therewith.

Some of the risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking information and statements contained herein include, but are not limited to: expenses associated with completing the Distribution Protocol, the inability to secure required third party approvals and the inability to realized anticipated proceeds.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive.  The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking information and statements included in this news release are made as of the date hereof and the Corporation does not undertake any obligation to publicly update such forward-looking information and statements to reflect new information, subsequent events or otherwise unless so required by applicable law.

SOURCE Ernst & Young Inc.

Dylan Holwell of the Monitor via email at [email protected] or by phone at 403.206.5431.