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The Land Conservancy placed under creditor protection

The Land Conservancy has been put under protection from creditors who are owed $7.5 million and a court-appointed monitor will lead a restructuring for the non-profit organization.
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The Land Conservancy's propeties include Abkhazi Garden on Fairfield Road.

The Land Conservancy has been put under protection from creditors who are owed $7.5 million and a court-appointed monitor will lead a restructuring for the non-profit organization.

TLC sought protection under the federal Companies’ Creditors Arrangement Act. Creditor protection, granted Monday in the Supreme Court of B.C. in Vancouver, extends to Nov. 4 and is expected to be renewed.

“This process could take a couple of years,” Alastair Craighead, chairman of TLC’s board of directors, said Tuesday. “We think this is the solution.”

Greater Victoria sites held by TLC include Abkhazi Garden, Madrona Farm, Ross Bay Villa and Sooke Potholes.

TLC owns and manages a diverse portfolio of 50 properties throughout B.C., from historic houses to undeveloped lands. TLC monitors more than 250 covenants on these and other B.C. properties.

Of the $7.5 million of debt, close to $1.5 million is short-term debt, Craighead said.

Daily TLC operations will be run by John Shields, who became director of operations in August.

“Essentially, the TLC is at a crossroads in its operational mandate and future purpose,” monitor Gord McMorran, of Wolrige Mahon Ltd. in Vancouver, said in court documents.

The organization needs time to “fully develop, then implement, a strategy that will facilitate the sale, transfer or donation of certain properties,” he said. That process is intended to raise money to pay creditors, keep TLC running and place properties with appropriate organizations.

McMorran’s job includes defining the future role of TLC and establishing a financial plan to allow it to continue land conservation. Land sales or transfers must be approved by the court.

Financial woes are long-standing at TLC.

Former board members raised alarms three years ago about money problems, complaining TLC would take out mortgages on existing properties to buy new ones and borrow from restricted funds to pay operating costs. They charged that it lacked focus and stretched too thin.

Mortgages, which are not used by most land conservancies, and the cost of staff were among the reasons cited for TLC’s fall into acute financial trouble as donations decreased.

Subsequent cost-cutting measures included reducing staff and moving offices.

Board member Briony Penn said the goals are to: “Get out of debt. Preserve the properties as best we can, and also set up the organization so there is long-term sustainability.

“Our great goal is that never again will this organization be in the news for sort of lurching into financial trouble.”

A team of professionals has been established to “analyze how you can get underlying value from some of these properties. How you can protect them. It’s complicated.”

The public will have an opportunity to comment and make proposals, Penn said.

“We’ve acknowledged that we’ve made mistakes. We’ve acknowledged that there needed to be things done. We’ve done our due diligence. This is the best option.”

TLC said its average monthly revenue is $101,000 and expenditures are $98,000. Net worth was pegged last year at $41.5 million, representing the value of land and covenants, deducting liabilities. Properties would likely be worth more on the open market, but “inalienable” status means almost none of them could be put up for sale.

cjwilson@timescolonist.com