One of the minor players in the CEF / DIL / Prince of Peace fiasco was a small development project known as Shepherds Village Ministries (SVM). Like the Prince of Peace village, this project was mostly about a seniors care / life lease type of development for older people to live. (You can read my initial report on SVM here and KPMG’s first report here.)
Long story short SVM also ended up in CCAA around the same time as CEF and DIL. KPMG was appointed liquidator and if you need some bedtime reading, KPMG has a web page here with all the documents they’ve been filing over the years. The last Board left things in an absolute mess – reserve funds that were supposed to be in place weren’t, deferred maintenance was piling up, the corporate books were in disarray, and SVM named in a number of class action suits. Consequently KPMG and its associated supporting organizations had to take on the roles of Investigator to get the Condo corporation organizationally sorted out along with taking on the duties of liquidating the SVM corporate body.
KPMG’s fifth report details
- a history of SVM and what is was formed to do,
- the nature of various class action suits against SVM, primarily for insurance
- this combination of factors meant that extraordinary steps were required to restructure SVM
- the efforts KPMG went to sell the various units over the course of a year before getting court approval to sell them for whatever they could get.
- found a resolution for the life-lease units so the occupants had certainty in their living quarters,
- dealt with the previously improperly constituted Condo Corp and provided the residence of SVM with a properly formed Condo Corp,
- managed the sale of unused lands and non-life resident properties to fund the work needed to fix everything.
According to this report, the bottom line in terms of recovering any funds for creditors:
- Due to the outstanding professional fees outlined later in this report, the Liquidator does not expect there will be a distribution to any creditor nor a return to any stakeholder of the estate.
SVM was in such a state that even after the assets were liquidated the Liquidator and their legal council wouldn’t get full payment for their services:
- The Liquidator and the Liquidator’s legal counsel have reached an agreement in relation to this shortfall and have agreed that, subject to the Court’s approval of the Professional Fees, the remaining funds be split on a pro-rata basis and any outstanding Professional Fees which remain unpaid be written off
The originating Memorandum of Association and Articles of Association are also included. The MOA is dated Jul 28, 1999 while the AoA was signed June 3, 1999. Both documents were signed by Ted Ulmer, Harold Ruf, and Steve Grande.
KPMG’s Application for Discharge and Dissolution (Court Filing 1701-07807) basically covers the same material as the liquidator’s fifth report in the form of a court filing.
So where does that leave us?
The SVM CCAA proceeding has concluded.
SVM will be cease to exist and its books will be destroyed.
The residents in SVM still have a home to live in.
The properties have been liquidated where appropriate.
The liquidator and the liquidator’s counsel were both short-changed of their fees.
The CEF depositors that had
$12.5M $17M (1) of their savings loaned to this operation are getting nothing in return.
And a mystery of how the SVM Board could, in good faith, sign documents that unconditionally guaranteed a ~$38M loan ABC District made to Encharis for an organization whose value topped out at
$12M $17M (1) at best. (KPMG’s first report – page 10, paragraph 44-45).
Fortunately in all this uncertainty and disappointment we have a God who is both faithful and just. He knows our suffering and pain because he too suffered betrayal and injustice by the church of his time and even by His own disciple. His triumph over sin, death, and the devil is the triumph of all who walk in faith and believe. For those who hold the form of religion while denying its power…a different outcome awaits.
In the end, our time in this vale of tears is nothing compared to the enternity that awaits for those who are found true to the faith. But for those who hide behind a synodical document and say nothing because “it was done by a different corporation” or they might get sued…
1 John 1:8-10: If we say we have no sin, we deceive ourselves, and the truth is not in us. If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness. If we say we have not sinned (hello LCC), we make him a liar, and his word is not in us (LCC).
(1) Update 2022-04-26 – thanks to a reader with a better memory of mine, the actual loss was ~$17M. In CEF: Higgerty Law Statement of Claim Section I – The Shepherd’s Village Loans where I go through Higgerty Law’s assertions:
100. Between 1999 and 2014, ABC District advanced to SVML either directly or indirectly through ECHS, CEF monies in the total amount of approximately $17,000,000.00 for the purpose of acquiring and developing the Shepherd’s Village lands (the “Shepherd’s Village CEF Loans”).
108. Between 2011 and 2014, ABC District and/or ECHS, forgave $12,575,685.00 of the Shepherd’s Village CEF Loans, thereby depriving the CEF Trust and the CEF Quistclose Trust of those funds.
This left an outstanding balance of $17M – $12,575,685.00 = $4,424,315.
One wonders where the $12.5M went…
Thank you again Ano.
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$17 MILLION DOLLARS lent to SVML.
And when everything was finally liquidated there wasn’t even enough to cover the professional fees.
Where did the money go?
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and just as important – who made the decision to send the $17M over, forgive the $12M, and is still a “member in good standing” with LCC?