Valentine sells assets to cover defaulted loan
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Valentine sells assets to cover defaulted loan
By JACQUIE MCNISH
Wednesday, October 23, 2002 – Print Edition, Page B1
TORONTO -- Indicted stock trader Mark Valentine is being forced to sell or give up control of real estate properties and corporate stocks after defaulting on a $5.3-million (U.S.) loan owed to a unit of Brascan Corp.
George Myhal, president of Brascan Financial Corp., formerly Trilon Corp., said Mr. Valentine stopped paying interest on the loan two months ago. Mr. Myhal said Brascan has called the loan and is taking steps to seize some assets pledged as security.
"Mr. Valentine is in default on his loan and we are taking steps to realize our collateral. . . . We are working with Mr. Valentine to monetize these loans. We expect a number of properties will be up for sale," Mr. Myhal said.
To date, Brascan Financial has taken over a 23.4-per-cent stake in Chell Group Corp., a troubled Toronto-based technology venture previously listed on the Nasdaq Stock Market and founded by Mr. Valentine's business associate Cameron Chell. The shares were among several assets pledged as security against the loan.
The loan was originally made in 2001, when Mr. Valentine was chairman of Toronto brokerage Thomson Kernaghan & Co. Ltd. (TK). At the time, Mr. Valentine was seeking a capital infusion for the firm because it had sustained huge losses on soured investments in technology stocks listed on Nasdaq.
Originally, the loan was guaranteed by TK, but as the firm's financial condition deteriorated, loan documents show that Mr. Valentine and his wife Stephanie agreed in April this year to pledge some of their personal assets as additional security. TK suspended Mr. Valentine in June and shortly after the company declared bankruptcy.
Also pledged as security against the loan are some commercial properties in Toronto and Alberta that are owned by holding companies affiliated with Mr. Valentine. Other security includes a cottage on Lake Simcoe, Ont., and a luxurious waterfront condominium in Key Biscayne near Miami. Both these residences, according to loan documents, are owned by his wife.
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