All in West! Capital Corporation Announces Sale of Days Inn Hotel in Hinton, Alberta

    




 WINNIPEG, June 7, 2012 /CNW/ - All in West! Capital Corporation (the  "Corporation")  announced today that it has agreed to sell  the the Days Inn hotel located in Hinton, Alberta (the "Days Inn Hinton") to Lexor Management Inc. ("Lexor") in consideration for the settlement of the outstanding mortgage  indebtedness owed to Lexor in the amount of $4,224,888, and subject to  standard closing adjustments (the "Transaction"). 

 The Days Inn Hinton has been appraised by an independent third party  appraiser at $3.0 million as at March 31, 2012.  Lexor has agreed to  accept the transfer of the Days Inn Hinton in full satisfaction of the  $4,224,888 owed to it under the mortgage loan.  Although the amount  owing under the mortgage loan relating to the Days Inn Hinton exceeds  the appraised value of the property by approximately $1.2 million,  Lexor has agreed to provide a full release of the Corporation and its  subsidiaries with respect to the balance owing under such mortgage  loan. 

 The Transaction was unanimously approved by the independent directors of  the Corporation.  Mr. Cornelius Martens, Chief Executive Officer of the  Corporation, abstained from voting in respect of the approval of the  Transaction due to the fact that the principal director, officer and  shareholder of Lexor is Mr. Peter Schiller, his son-in-law.  Lexor also  manages the day-to-day affairs of the Corporation's hotel properties. 

 To the extent that the Transaction may be considered to be a related  party transaction, the Corporation will rely on the "financial hardship  exemption" from the minority shareholder approval requirement as a  result of the satisfaction of the following conditions: 

  





    (a)      the Corporation is insolvent or in serious financial
             difficulty;

              

    (b)      the Transaction is designed to improve the financial position
             of the Corporation;

              

    (c)      the Transaction is not made pursuant to a bankruptcy
             proceeding;

              

    (d)      the Corporation has four independent directors in respect of
             the Transaction (Mr. Cornelius Martens declared a conflict of
             interest due to his relationship with Mr. Peter Schiller);

              

    (e)      the board of directors of the Corporation, acting in good
             faith, determined, and all of the Corporation's independent
             directors, acting in good faith, determined that: (i)
             paragraphs (a) and (b) above apply; and (ii) the terms of the
             Transaction are reasonable in the circumstances of the
             Corporation.

              






 The Transaction is scheduled to close on June 15, 2012 and is subject to  receipt of TSXV approval. 

 While the Transaction will improve the financial condition of the  Corporation, the Corporation will continue to negotiate with and  consider available alternatives with respect to its other creditors.   The Corporation continues to be in default of all of its debt  obligations, which include the following defaults: 

  





    (i)        the Corporation is in default of its obligation to repay the
               principal amount on the Series A convertible debentures (the
               "Series A Debentures") in the aggregate principal amount of
               $6,495,000 on March 31, 2012, the maturity date of the
               Series A Debentures;

                

    (ii)       the Corporation is in default of its obligation to make
               monthly interest payments on the Series A Debentures from
               April 30, 2010 to March 31, 2012, the maturity date of the
               Series A Debentures.  The Corporation ceased monthly
               interest payments on April 30, 2010;

                

    (iii)      the Corporation is in default of its obligation to pay
               interest on the Series B convertible debentures (the "Series
               B Debentures") which mature on September 30, 2012.  The
               Corporation ceased monthly interest payments on April 30,
               2010.  The holders of Series B Debentures are entitled to
               instruct that the indenture trustee for the Series B
               Debentures demand repayment of the aggregate principal
               amount of the Series B Debentures ($1,180,000) plus accrued
               and unpaid interest;

                

    (iv)       the Corporation is in default of its obligation to pay
               interest relating to its Series C senior convertible
               debentures (the "Series C Debentures") which mature on
               October 1, 2012.  The Corporation ceased monthly interest
               payments on November 30, 2010.  The holders of Series C
               Debentures are entitled to instruct that the indenture
               trustee for the Series C Debentures demand repayment of the
               aggregate principal amount of the Series C Debentures
               ($2,353,750) plus accrued and unpaid interest;

                

    (v)        the Corporation is in default of its obligation to make
               principal and interest payments to the mortgagee under its
               mortgage financing and security documents relating to the
               Econolodge Inn and Suites in Hinton, Alberta. The
               outstanding mortgage balance is currently $6,494,820; and

                

    (vi)       as a result of the defaults noted above, the Corporation is
               in breach of the "cross-default" covenants under its
               mortgage financing and security documents relating to the
               Phase I and Phase II Best Western hotels in Grande Cache,
               Alberta.  The outstanding mortgage balances for such
               properties are currently $7,826,983 in respect of the Phase
               I property and $4,702,513 in respect of the  Phase II
               property.

                






 The Corporation is in ongoing discussions with its mortgage lenders  regarding the defaults under its mortgage indebtedness and potential  restructuring of such indebtedness.  The Corporation is continuing to  evaluate alternatives available to it.  The Corporation has formed a  special committee which is considering the Corporation's alternatives  specifically as it relates to its outstanding convertible debentures  with a view to making a recommendation to the Corporation's board of  directors. 

 The TSX Venture Exchange has not reviewed or approved the contents of  this press release. 

 Forward-Looking Statements 

 This press release contains forward-looking statements regarding the  proposed transaction involving the Days Inn located in Hinton,  Alberta.  There can be no assurance that the proposed transaction will  be completed on the terms described herein or at all.  

All in West! Capital Corporation


CONTACT:  Mr. Cornelius Martens, President and Chief Executive Officer, orCornelius William Martens, Investor Relations, Tel: [phone] 


    

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