An Aug. 15, 2005 agreement between Jarrett Anderson and Glenn Anderson indicated that Jarrett had bought Glenn’s shares in Gerobeco Inc. for $375,000.
At the time, this cleared the way for a $475,000 mortgage from the Bulkley Valley Credit Union. The credit union had stipulated that the loan could only proceed if Glenn was no longer a shareholder, officer or director of Gerobeco Inc.
At the time, Glenn was a shareholder and director of the troubled companies, Area Finance and 439288 B.C. Ltd.
After personally guaranteeing the money of local investors in 2004, Glenn announced personal bankruptcy, filing in 2009.
Approximately 480 local creditors received pennies on the dollar for their $38 million worth of investments in the two companies.
When the PriceWaterhouseCoopers (PWC) final report to creditors was released on Feb. 7, 2013, the matter of the share transfer between Jarrett and Glenn remained unsettled. It was deferred to a later court date.
The share transfer became an issue when Prince George trustee in bankruptcy, John S. Beverly and Associates – who was handling Glenn’s personal bankruptcy proceedings – challenged the propriety of the transfer, alleging that it concealed the real value of assets, as well as having occurred within five years before the start of bankruptcy proceedings, which upon certain conditions, could nullify the transfer.
Beverly alleged that the fair market value of the shares amounted to $537,886. Beverly was asking the courts to award that amount, plus interest, from Jarrett.
On Feb. 28, 2013, B.C. Supreme Court judge, the Honourable Mr. Justice Meiklem, ruled against Beverly’s claim and dismissed the court action.
“In light of the dearth of any evidence that Jarrett Anderson received any assets, money, remuneration or benefit as a result of the challenged transfers,” Meiklem said, “I do not find it justified to order the accounting of same sought by the trustee [Beverly].”
Essentially, the court agreed with Jarrett that the transfer in question was a ‘sham transfer’ with no real exchange of assets.
“The judge found that Jarrett did not receive the funds and that the bankrupt [Glenn Anderson] remained the beneficial owner,” said Christopher Stocco, PWC spokesperson.