Court filings in the receivership of companies behind the delayed development of a ski and snowboard resort near Squamish include accusations of conflict of interest against two Aquilini Investment Group executives.
On Monday, a B.C. Supreme Court judge appointed Ernst and Young after Garibaldi at Squamish Inc. (GAS Inc.) and Garibaldi at Squamish LP (GAS LP) defaulted on $65 million owing to Luigi Aquilini’s companies Aquilini Development LP, Garibaldi Resort Management Co. Ltd., and 1413994 B.C. Ltd.
GAS Inc. was established in 2001 to develop the Brohm Ridge resort on Squamish Nation land. The 2016 provincial environmental approval for the estimated $3.5-billion project was extended in 2021 with a January 2026 deadline to begin construction.
The Dec. 1 reply to the receivership petition said that four GAS Inc. directors, including Northland Properties chair Bob Gaglardi, “have expressed the concern that, as employees and/or director-officers of affiliated entities within the Aquilini Group — essentially the petitioners themselves — chairman James Chu and director Bill Aujla have a conflict of interest and should recuse themselves from GAS lnc.’s decision making concerning the matters at issue in the petition.”
Chu joined Aquilini as a senior vice-president in 2017, two years after he retired from a 36-year career with the Vancouver Police Department. Chu was chief in 2011 when a riot broke out near Rogers Arena the night the Aquilini-owned Vancouver Canucks lost Game 7 of the Stanley Cup to the Boston Bruins. Aujla was Vancouver city hall’s real estate general manager until he became an Aquilini vice-president in 2018.
Minutes filed in the case show that nine of the 10 GAS Inc. board members met by teleconference on Oct. 10. Roberto Aquilini, one of Luigi’s three sons, was absent. They agreed by a 7-2 vote to form a special, seven-director committee in reaction to the Sept. 22-filed receivership petition. Chu and Aujla agreed not to participate in the special committee.
However, certain directors, including special committee chair and Toronto condo developer Hunter Milborne, continue to be concerned that Chu and Aujla remain in conflict of interest and should refrain from voting on matters related to the special committee, said the court filing from the special committee’s lawyers at the Dentons law firm.
Board minutes show that Chu invited lawyer Mitchell Gropper as a guest to provide opinion on the conflict of interest allegation. The minutes say that Gropper understood Chu and Aujla were directors/officers of ADLP-owned subsidiaries/entities, but they did not act as directors or officers of the parent company itself.
Director Stephen Jackson, a lawyer with Northland Properties, said that he, along with fellow directors Robert Toor and Gaglardi, “agreed, expressed and believed that GAS should not be seeking or accepting advice from Mr. Gropper since he was not impartial,” the minutes said.
Jackson believed that GAS should file opposition to the petition “in its entirety or to some degree,” depending on legal advice. He also "thought that the GAS management should be taking some steps to protect it from being in default.”
Chu said ADLP told him there was no funding available for external counsel.
"Director Jackson asked further on what funding GAS had available for a defence at this point and how much money the GAS had now,” the minutes said. “Chairman Chu replied that GAS had no money. When there was a bill requiring payment, it would be presented to ADLP and the transfer would be made at that time.”
Jackson’s original motion for a three-director special committee, involving himself, Toor and Milborne, was defeated 5-4.
Near the end of the meeting, Chu had questions for Jackson. Particularly, why the name of Bennett Jones lawyer Jonathan McCullough had “ended up on our email chain.”
According to the minutes, Jackson said McCullough was not acting for GAS, but he was not prepared to discuss him. Chu asked a second time, if McCullough was the counsel for Jackson himself and the Northland Properties directors.
“Director Jackson replied repeating that counsel was not counsel for GAS and director Jackson was not prepared to discuss him.”
Chu asked Toor why a board email had been copied to McCullough, “when the board did not know who he was and who he was working for.”
Toor said he copied the email to McCullough “by mistake.” While he was taking instructions from McCullough, he said the lawyer was not acting for GAS. Jackson replied with the same answer.
“Chairman Chu said was this the ‘fifth amendment’? Director Jackson confirmed that the counsel was not acting for GAS, so he thought there was no reason to disclose who the counsel might be acting for.”
Gropper added to the conversation, but what he said was censored from the document.
