CALGARY, Alberta–(BUSINESS WIRE)–Westphalia Dev. Corp. (the “Corporation”) today announces a restructuring filing initiated in the Alberta Court of King’s Bench (the “Court”). On January 14, 2025, the Corporation obtained an initial order (the “Initial Order”) from the Court commencing proceedings under the Companies’ Creditors Arrangement Act of Canada (“CCAA”). Pursuant to the Initial Order, a 10-day stay of proceedings has been granted in respect of the Corporation to allow the business to continue to operate without disruption while the Corporation pursues potential strategic and restructuring alternatives under Court supervision for the benefit of its stakeholders. The Court-ordered process will be continued on January 23, 2025 where the Corporation anticipates seeking further order(s) from the Court extending the initial stay of proceedings, among other things.
The decision to commence CCAA proceedings was made following careful consideration by the Corporation’s Board of Directors and management. The Corporation has operated and can only continue to operate with the ongoing financial support of certain stakeholders, including its manager, Walton Global Investments Ltd. (“Walton Global” or the “Manager”). The Corporation has been unable to pay management fees owing to the Manager (and the Manager’s predecessor) since 2016. The Manager has now advised the Corporation that it cannot continue to provide services and funding on a go forward basis unless a plan is put in place to address the Corporation’s liquidity and outstanding debts to the Manager and others. The CCAA process will provide an opportunity to prepare and file a plan of arrangement and compromise for consideration by the Corporation’s creditors and other stakeholders with respect to the restructuring of the Corporation. Under the Initial Order, the Corporation will continue carrying on business in a manner consistent with the commercially reasonable preservation of their businesses and assets.
Overview of the Corporation
The Corporation is the shareholder of the largest co-owner of the Westphalia Town Center in Prince George’s County, Maryland. The property includes residential, commercial and industrial land uses. The Property Master Plan is designed as a pedestrian-oriented, mixed-use community. Westphalia Town Center includes family-friendly neighborhoods, and in the near future community shopping, restaurants, and potentially an elementary school, a veteran’s hospital, and a hotel.
Through the CCAA process the Corporation received a Court Order that will allow it to pursue a restructuring of its affairs to improve its balance sheet while allowing streamlined reporting. The Manager of the project, Walton Global will assume full operational responsibility for taking the project through to completion, arranging for payment of the secured and unsecured creditors through the proceeds of sale, with the objective of completing the project to maximize recoveries. The Corporation, with the assistance of the Manager, has achieved a great deal to date:
- Much of the required infrastructure is deemed substantially complete, including roadways and interchanges for Route 4, Route 223 and Presidential Parkway East.
- Unanimous approval of the Detailed Site Plan from The Maryland-National Capital Park and Planning Commission for Parcels A and B, streamlining and accelerating the approval timeline for the future mixed-use development.
- Purchase offers have been received for Parcels A and B from best-in-class retail developers to build a first-class mixed-use commercial development. Deal terms are currently being negotiated, and an agreement is expected in 90 days.
- Hired a best-in-class engineering and planning firm to complete the entitlements for the remaining 96 acres (approximately), which includes the adjacent land to the north owned by a related party. The expectation is that this work will take 2 to 3 years to complete and receive full approval.
- Lastly, there is a parcel under contract for industrial use and another being considered for a future Veteran’s hospital.
About Walton Global
Walton Global is a privately-owned, leading land asset management and global real estate investment company with more than 88,000 acres of land under ownership, management and administration in the United States and Canada, totaling $4.5 billion. With more than 45 years of experience, Walton has a proven track record of land investment projects within the path of growth in the fastest-growing metropolitan areas. A total of ~$2.7 billion has been distributed to investors located in 87 countries. The company works closely with top U.S. home builders, developers and industry partners. Business lines include exit-focused pre-development land investments, builder land financing, development projects, DST offerings, and various fund structures. For more information, visit walton.com.
FTI Consulting Canada Inc. is the Court-appointed Monitor in the Corporation’s CCAA proceedings. During the CCAA proceedings, management of the Corporation will remain responsible for managing day-to-day operations under the general oversight of the Monitor. Copies of any filed Court materials and updates will be available on the Monitor’s website:
http://cfcanada.fticonsulting.com/westphaliadevcorp
This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. Forward-looking information is based on the current expectations, estimates and projections of the Corporation at the time the statements are made. They involve a number of known and unknown risks and uncertainties which would cause actual results or events to differ materially from those presently anticipated. The risks, uncertainties and other factors that could cause the Corporation’s actual results and performance in future periods to differ materially from the forward looking information contained in this news release include, among other things, the outcome of the CCAA process, expectations with respect to the receipt of additional orders and authorizations from the Court, the preparation and filing of a plan of arrangement and compromise, the ability of the Manager to successfully manage the project under the oversight of the Monitor, the development of Westphalia Town Center, general economic and market factors, including interest rates, a decline in the real estate market, changes in government policies and regulations or in tax laws, changes in municipal planning strategies and whether certain development approvals are obtained and changes in the Canadian/U.S. dollar exchange rate, in addition to those factors discussed or referenced in documents filed with Canadian securities regulatory authorities and available online at www.sedarplus.ca.
Contacts
Media Contact:
waltonglobal@allisonworldwide.com