Skypower deadline passes
Update Dec. 4 : Stantec moved last Friday to vacate it’s liens on Prince Edward County properties leased and optioned to Skypower Corporation as part its Byran wind energy project. The Ontario Supreme Court approved the request.
The unsold remnants of the once high-flying wind energy developer, Skypower, have been cut loose.
The former chief executive and the debtor in possession, CIM Group, have taken over Skypower’s solar business near Napanee, its offices in Toronto and even its name.
The unsold bits have been renamed Interwind.
No buyers have yet come forth with firm bids on several wind energy development projects, including the Byran project in Prince Edward County, or the company’s inventory of wind turbines. The sale of assets was to be completed by the end of November. But the company has won an extension until Jan. 29 to see it can find a buyer for even some of its development projects. It is no longer trying to sell the wind energy development business as a block. Instead it has asked its selling agent to go back to those companies that expressed interest in the first round of bidding to try and attract a bid—any bid.
The deadline for this second round of bidding is Dec. 21.
The sales agent, Marathon Capital, believes it is close to a deal to sell the company’s 134 turbines, but a binding offer has not yet been received for these assets.
Aside from selling its solar business to CIM Group, Skypower also found buyers for its nine-turbine operating wind project in Fermeuse, Newfoundland and its partially completed project in Digby, Nova Scotia.
LIENS STILL LOOM OVER LOCAL LANDOWNERS
With the prospect of the sale of the Byran wind energy project dimming, local landowners are having to reassess their future plans. Some had made, or had planned to make, investments or purchases based on the projected income stream. Even those who were only marginal participants in the Byran project must now deal with construction liens registered on the title to their property.
Stantec, an engineering consultancy, says it won’t make these landowners pay the $265,000 it is owed by Skypower, and it will provide a letter to ease these concerns.
But highly recognized real property lawyer Garth Manning, Q.C., and 1999 Canadian Bar Association recipient of the Louis St-Laurent Award of Excellence, says Stantec’s letter should offer little comfort to local landowners.
“I would never let a client close a purchase or advance money under a mortgage in the face of a registered construction lien and I would be professionally negligent if I did,” said Manning.
He offered this example.
“Say Farmer X owns lands. He wishes either to sell at arm’s length or borrow money from his bank to be secured by a mortgage on those lands. The proposed purchaser or the bank as the case may be will retain a lawyer to search title to the lands and to give a written opinon that Farmer X owns them free of any legal problems.
“The lawyer searches title. He/she finds a construction lien registered by Stantec against title to the lands in question. The lawyer would not be doing his/her job properly if he/she did not advise the client immediately of the existence of the lien and go on to advise the client (in the case of a purchaser) not to close and (in the case of a bank) not to advance any money under the proposed mortgage until the construction lien was removed from title by registration of a release by Stantec or by a court order. The concept is really that simple.
“From a pragmatic and practical point of view, the lawyer has no actual knowledge of whatever the legal arrangements may be between Farmer X, Skypower Corporation and Stantec.”
“All he or she sees is a construction lien registered against the lands which constitutes a significant problem to any purchaser or bank who might inherit whatever the problems are,” added Manning. “ I would never let a client close a purchase or advance money under a mortgage in the face of a registered construction lien and would be professionally negligent if I did. It’s not up to the lawyer to delve into whatever the merits and demerits of the situation between Farmer X, Skypower and Stantec may be. But it is the lawyer’s job to ensure that his client gets unquestionably unimpeachable title.”
Some local families are learning the harsh reality of these construction liens. A Sophiasburgh senior hoping to sell her home and spend winters in a warmer climate had two offers retracted after the potential buyers learned of the liens on her title. At least one more potential sale has fallen through, due at least in part to the presence of the construction liens on title.
If Byran is unable to attract a buyer—a prospect made more challenging as a result of the Department of National Defence’s written objections to the project—the liens will stay in place unless ordered by a judge that they be removed or Stantec decides to expunge its own liens. There seems little prospect of either event taking place soon.
Written by Rick Conroy
Wellington Times
4 December 2009
Tags: Wind power, Wind energy
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