Looks to me like we may have a new "master" soon:
EdperBrascan unit wants right of first refusal on assets
By KEITH DAMSELL
The Financial Post
TORONTO - Trilon Financial Corp. said yesterday that as the number one creditor of Royal Oak Mines Inc., it should have the right to veto any deal to sell the bankrupt company's assets. And for the first time, it indicated a Trilon subsidiary may be interested in buying Royal Oak's Kemess mine and other assets to recover the $180-million it is owed.
In a filing to the Ontario Superior Court of Justice, Commercial Court, Trilon -- the financial arm of Toronto's powerful EdperBrascan Corp. -- said it will ask the court for the right to veto any deal that does not repay its debt in full. The filing also says if Trilon refuses to support a deal, the receiver may then sell the Kemess mine and remaining assets to Trilon subsidiary Northgate Exploration Ltd. "free and clear of all encumbrances for a price equal to all or a portion of the . . . debt."
After months of struggling to restructure operations, Royal Oak was placed in receivership last month. The operator of four gold mines in Canada has more than $600-million in liabilities.
Court-appointed receiver PricewaterhouseCoopers Inc. and Credit Suisse First Boston are marketing Royal Oak assets, including the Kemess South project in British Columbia. The auction is to be completed by Aug. 31.
The Trilon move follows allegations Margaret Witte, Royal Oak's former chief executive, and four senior managers conspired to defraud the company of more than $4-million (US) in their final days in the executive suite. The allegations are detailed in a May 10 report from the receiver and led to the filing of a multi-million-dollar lawsuit in U.S. bankruptcy court two days later. The company's former senior executives have said they have done nothing illegal or inappropriate. A statement of defence has yet to be filed.
In other developments, Svedala Industries Canada Inc. is expected to appear in court Friday seeking an order demanding Royal Oak return $2.8-million in spare parts. Since 1997, the North Glengarry, Ont.-based company supplied the Kemess mine with equipment. Royal Oak failed to pay the bills, leading to the filing of a builder's lien by Svedala last year.
"Svedala has attempted to obtain possession of the spare parts, but was refused access to the Kemess South site without a court order," notes a May 12 court filing.
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