Buyers who invested in a now bankrupt RV development during the Shuswap real estate boom have banded together to purchase the property out of a court-ordered sale.
Two of the purchasers at Scotch Creek Village Resort, Garry Worth and his wife Susan, have also filed a class-action lawsuit against the developers of the bankrupt resort, the former Frank's Campground across from North Shuswap provincial park.
Worth, a retired Weyerhaeuser Co. employee who was a leader with the Communications, Energy and Paperworkers Union, purchased two lots last year. For $150,000, the couple was given a shared interest in a company called Shuswap Lifestyle Developments.
"We bought two. I have two daughters," he said in an interview Friday. "I wanted to share it with them or I might have sold one."
But a year later, in the midst of a stock market crash and worldwide recession, the developer was forced into bankruptcy and purchasers had little recourse. They have no interest on the title because the property was not yet registered as a strata or subdivided.
Buyers' shares were supposed to be turned into RV lots once the development was further along.
Worth is attempting to have his suit against the company and its directors certified as class action, representing purchasers of about 80 lots. He is also filing to have purchasers declared as the second creditors, behind the Okanagan firm that holds the first mortgage.
Directors named in the court action are Rene Gladu, Eugene Chartier, Douglas Ruemper, Richard Windjack, Warren Massier, Sheldon Windjack, Cheryl Gladu, Christopher Sweetnam-Holmes as well as related companies.
The allegations have yet to be heard in court and the company has not filed a statement of defence.
Worth estimated the company raised almost $8 million after it purchased the property from the longtime owner for $4.5 million. The development was part of a rush on Shuswap Lake that saw historic campgrounds purchased and converted to RV developments.
Worth said the majority of lot purchasers have banded together and placed a bid with the court-ordered receiver.
"Lot owners have committed another $40,000 per lot."
Worth said the buyers intend to develop the property themselves and sell the remainder of the estimated 40 lots in a bid to recoup their investment.
"It's the only way we'll ever save our $75,000 (purchase price.)"
The receiver, Willis Associates in Vernon, has placed the property on the market for sale. Some utilities are installed, but it remains far from completion.
"The property is still for sale and we have interested parties," said receiver David Wilis. "We just asked for offers and are prepared to deal with them as they come."
The Worths' class-action suit alleges the company and its directors transferred funds to another project in Ottawa, against the interests of share purchasers.
In a document, the company pledged it would sell 139 RV lots to raise more than $15 million for the project.