Red Mountain Resort

The Partnership has an accumulated deficit of $28,597,384 as of April 30, 2017, and has reported net losses of $3,880,346 and $3,314,500 for fiscal 2017 and 2016, respectively, driven primarily by interest expense on convertible debt. Total partnership interest (net equity) is negative at $(7,039,540).

“Net loss for fiscal 2017, was $3,880,346, a 17% increase compared to $3,314,500 for fiscal 2016. The increased loss is primarily attributable to interest expense, the majority of which were accrued.”

Jeff Busby, a director of the General Partner, and the Juice Trust (which he controls as trustee and which benefits his children) converted CDN$21,385,349 in loans owed by RMR to themselves into 2,413,696 Class C Units and 2,413,696 Class C2 Units in July 2017, immediately prior to the Class D offering. This gives Busby-controlled entities approximately 90.25% of both Class C and Class C2 Units, which sit just behind Class D in the distribution waterfall but ahead of Class B and A in return of capital.

“In July 2017, the Juice Trust and Jeff Busby, lenders to RMR, converted an aggregate of CDN$21,385,349 in loans owed by RMR into 2,413,696 Class C Units and 2,413,696 Class C2 Units. Jeff Busby, a director of the General Partner, is the trustee of the Juice Trust, which owns 63.1% of the voting shares of Powder Corporation. The sole beneficiary of the Juice Trust is the Busby Children's Trust, all of the beneficiaries of which are the children of Jeff Busby, and the trustee of which is Jeff Busby.”

Value Powder Corporation, controlled by the Juice Trust (trustee: Jeff Busby, director), holds 81.72% of Class B Units, 90.25% of Class C Units, and 90.25% of Class C2 Units as of August 1, 2017. This extreme concentration means a single director-affiliated entity dominates the senior unit classes above Class D in the distribution waterfall.

“Value Powder Corporation. Jeff Busby, a director of the General Partner, is the trustee of the Juice Trust which owns directly or indirectly 63.1% of the voting shares of Value Powder Corporation. The sole beneficiary of the Juice Trust is the Busby Children's Trust, all of the beneficiaries of which are the children of Jeff Busby, and the trustee of which is Jeff Busby.”