|Lynn Holman, seen here in happier times, and her husband Keith continue to battle in court with the Bank of Montreal over the loss of their Penticton area wine holdings.|
However, their court battles with the Bank of Montreal are far from over.
B.C. Supreme Court Justice Ronald Tindale is expected to soon deliver a decision on the bank's application to dismiss a counterclaim launched by the Holmans.
John Drayton, the Holmans' lawyer along with Reinhart Burke, said the Penticton couple was given judicial permission more than a year ago to sue the Bank of Montreal. However, rather than proceed with discovery and other initial legal steps, the bank launched its own counterclaim now before the courts.
Vancouver lawyer Heather Ferris, representing the Bank of Montreal, has declined to comment on the case, noting it is still awaiting a court decision.
A hearing before Tindale was held last month in B.C. Supreme Court in Vancouver. The Holmans are listed as defendants along with several companies connected to Holman Farms and their associated wineries, including Lang Vineyards, Stonehill and Soaring Eagle.
The Holmans' holdings, appraised at $55 million in 2007, were eventually sold at fire-sale prices in 2010 and 2011.
The couple owned about 22 different properties, mostly vineyards, from Summerland to Keremeos. They also owned seven wineries and a distillery.
Five of the largest properties, appraised at $22.7 million, sold for a combined $8.4 million. This left the Holmans and many of their other creditors out in the cold.
The Holmans argue that the sale of the properties at such low prices was "improvident" - in other words, thoughtless.
Now the Holmans live in a motor home, spending each winter in Southern California and elsewhere before coming back for summers in the Okanagan.
"We've been living in an 18-foot trailer that my father-in-law left my wife when he passed away," Keith Holman said in a telephone interview. "For two years we've been living in provincial parks and we've been down travelling (to southern climes) wherever we can find warmth until winter is over in Canada."
Keith said that originally a "soft receivership" agreement had been reached with the bank, which would enable them to keep their house and some of the core wineries.
"We would off a few properties to catch up on our debt," he said. "Then we would be left with probably the gem of our properties, which was our home, Soaring Eagle, Langs and possibly a couple of others."
The Holmans owed the Bank of Montreal $12 million on assets appraised at $40 million in 2007. A further $4 million was owed to various local mortgage holders on other properties appraised at $15 million.
"There was a huge discrepancy between what we owed and the (appraised value of) assets that we had," he said.
The bank asked for a reappraisal of the properties in spring 2009. Holman said the appraiser found that the values were holding, but did issue a warning.
"It came out from the appraiser that values were holding, but if it was going to be a forced sale, that the sale value would be about 10 per cent less," he said. The Holmans thought that even if that meant a loss of $5.5 million on properties worth $55 million, they could still hold their own financially.
If everything had been sold, they could have paid off their $16 million in combined debt and still had millions in assets.
However, by the fall of 2009 with the Holmans' businesses in receivership, Keith said the bank opted to sell the assets at less than half their appraised value.
The impact on the real estate market was immediate.
"All of a sudden, I'm sitting there with half my equity value," he said. "All of sudden everybody went crazy."
The now-flooded real estate market saw other vineyard prices plummet.
"Nobody was able to pull out because everybody was pointing at my prices," he said. "So we had neighbours phoning us up, very angry.
"All of a sudden that made a lot of people in the wine industry offside on their loans so they couldn't borrow money."
Before an agreement could be reached with Farm Credit Corporation to take over the bank's loan, the Holmans' businesses were placed into "hard" receivership.
"They came in and locked us out and froze our bank account and closed the businesses," he said. "They took everything. I lost the home in August 2010."
Five major property sales were approved by the court from January though May 2011.
Keith alleges the bank's actions "killed the equity and destroyed the chance (of the creditors receiving any funds) with the liquidation approach that they got the receiver to do."
"We never felt we were endangering our creditors at all, because we had all of that
Keith also offers others a bit of advice.
"You'd better realize if you start getting the bank on you, you'd better get to lawyers and be very careful about what you sign," he said.
The allegations have not been proven in court.