Camrose Casino owner in receivership, but plan to relocate to Edmonton remains
Mayfield Investments put in receivership over $38M debt to ATB Financial
The company that owns the Camrose Casino is in financial trouble, but the plan to move the casino to Edmonton is still in place.
Mayfield Investments Ltd., which runs the casino through its company Camrose Casino Corp., was put into receivership on Oct. 24 — two weeks after Alberta Gaming, Liquor and Cannabis (AGLC) approved the application to relocate the casino.
But an agreement exists to sell the casino's gambling license to the company proposing to build and operate the new location.
"That's going to happen," Mayfield Investments chairman Howard Pechet told CBC News on Nov. 1.
"They've already paid most of the money to Mayfield for the licence, and it's going to go ahead."
Mayfield Investments owes more than $38 million to ATB Financial, according to court documents. The bank pursued the receivership this year after initially demanding repayment in 2023.
Under a receivership, a third party is put in charge of a company and its assets in an effort to collect on unpaid debts from a secured loan. In this case, accounting firm Ernst & Young was appointed as Mayfield's receiver.
According to the receiver's first report on its activities, there is a plan in place to sell the Camrose Casino's gambling licence to Capital City Casinos Ltd. for $5.5 million.
That company — not Mayfield, or Camrose Casino Corp. — is proposing to develop and operate the new casino in southeast Edmonton.
Edmonton non-profits have criticized the prospect of a new casino because it's set to stay in the rural pool for charitable gaming events. That means Edmonton charities would be excluded from its revenues in the provincial charitable gaming system.
Beyond the licence changing hands, building a new casino in Edmonton still requires further municipal approvals.
Camrose Casino operations continue
The receiver's Oct. 28 report says the parties are still waiting on the AGLC to take the last step of cancelling the existing gambling licence and reissuing it to Capital City Casinos, before Mayfield gets the remainder of the money — unless they both agree to some other date.
In the meantime, the AGLC issued the receiver an interim licence to operate the Camrose Casino.
"As such, the casino will remain open and operations will continue, including any upcoming charity casino events," the AGLC said in a late October statement.
The regulator is monitoring the situation and evaluating any impact on the casino relocation, but no decisions had been made, the statement said.
Besides the Camrose Casino, Mayfield owns the Medicine Hat Lodge and a partial interest in the company that owns the Copper Coulee Casino, attached to the hotel. It also owns a 74 per cent interest in the operating company of Calgary's Stage West Dinner Theatre.
Mayfield hopes to be able to exit the receivership, and has been working to secure new financing, Pechet said.
"ATB has been our main banker for 50 years and we've always had a great relationship with them," he said.
"They finance many hotels for us and we've always been a good client."
The impact of COVID on hospitality businesses, plus a major flood at the hotel attached to the Camrose Casino, put the company in a difficult spot, Pechet said.
"The business of the casinos and the hotels was extremely good — we've been in business for 50 years," he said.
How the legal process unfolded
Court of King's Bench Justice Michael Lema initially granted the receivership order in September. It came with an agreement between ATB and Mayfield to hold off on further proceedings until the end of October, as long as a series of conditions were met.
But Mayfield didn't fulfil several parts of the agreement, so ATB took action to put a receiver in place, according to further court filings.
Mayfield sought to stay the receivership order in an application filed Oct. 23, arguing the business is "on the verge of solvency."
"Refinancing is imminent," Mayfield Investments president Jason Pechet — Howard Pechet's son — said in an affidavit.
That, coupled with proceeds from the casino's gaming licence, "will discharge all debts to secured creditors," he said.
A brief prepared by the company's lawyer argued that the receiver's appointment risks "the potential waste of assets, and unnecessary detrimental effects to stakeholders."
Court of King's Bench Justice Michael Marion dismissed the application on Oct. 30, saying Mayfield hadn't established a stay as necessary.
He noted the receiver's work was already underway: communicating with Mayfield employees about the situation, inspecting properties and reviewing financial information. By that point, the receiver had also terminated Jason Pechet as president.
"ATB argues that the egg cannot be unscrambled now. I find that, while the egg may not be fully scrambled at this point, it has been cracked and is already bubbling on the griddle," Marion said in his decision.
"It would be inconvenient, and may cause confusion and unintended consequences, to try to put the egg back together by granting the relief Mayfield seeks."
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