Wes Surrett, operations manager at Pictou Lodge, said he is working hard to keep things running smoothly at the resort, which has been placed into receivership.
Since learning about the receivership himself last Friday, he’s been fielding calls from anxious brides who have their weddings booked for the upcoming season and trying to deal with the concerns of others who made reservations.
His hope, which he shares with those who call, is that the business will open as usual in May.
Surrett said he was shocked to hear that the Lodge had gone into receivership because they had a strong season last year and were looking good for this year.
“The bookings right now that we have on the books are 30 per cent higher than last year at this time,” Surrett said. “It’s probably one of the best forecasted years. We have a record number of weddings right now.”
The resort, originally built in 1926 and once owned by CN Rail, has been placed under the control of Grant Thorton, the official receiver appointed by the Royal Bank. The business will continue in the interim to accept bookings in the anticipation of finding a new owner for the 2013 season, according to a release. The seasonal resort employs between 60 and 70 full-time and part-time staff during full operations. Over the last several years, under new ownership, the resort has gone though several major upgrades but with the event of an unfortunate fire in June of 2011 in the kitchen, the business was never able to recover from the negative working capital shortage created from the fire, said Calvin Wadden, one of the four shareholders in the business.
Substantial cost overruns from the rebuild, challenges with adequate insurance coverage and delays in completing renovations in time for the start of the 2012 season all contributed to the current position of the business, the release stated.
“There was a huge domino effect that carried on,” Wadden said by phone. He said the shareholders were unable to make any additional cash injections and were faced with no other option. They had tried to arrange a purchase agreement twice, to no avail. One deal started the process in November, but fell apart in January and then a last minute effort fell through as well.
“It just got to the point where we didn’t have enough time to deal with it,” he said.
Had they not put the business into the hands of a receiver, Wadden said, it would have had to close and the staff wouldn’t have gotten paid. This approach was the best way to deal with the situation, he explained.
He said he firmly believes the business is valuable though and could generate profit for the new owners.
“It’s a good investment with a good return,” he said.
He said he believes the business is worth about $8 million, although he doesn’t expect it to sell that high.
Attempts to reach Grant Thorton have been unsuccessful.