OLDS — The Olds Institute (OI) board agreed to sign a legal document Monday to work out an arrangement to repay a $14 million loan as part of a refinancing package called for by the Town of Olds.
According to Investopedia.com, a forbearance agreement is “an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his or her payments.”
Olds Institute describes a forbearance agreement as "a standard legal form that is used when a borrower defaults under a loan agreement.
“OI has never defaulted on its payments,” an OI news release says.
Olds Institute is a non-profit community and economic development organization founded in 2001 by the town along with Olds College, Olds & District Chamber of Commerce and the Olds Regional Exhibition.
It’s tasked with encouraging the development of Olds as an innovative and entrepreneurial community and improving quality of life for its residents with the help of volunteers.
OI oversees Olds Fibre Ltd., a for-profit business that owns O-NET, a community-owned firm that provides high-speed internet as well as phone and TV service. Also within that umbrella organization is Mountainview Power.
In late May, town council announced a desire to work out with OI the repayment of a $14 million loan as part of a larger effort to have that entity’s loan refinancing to be “reorganized” and "additional process thereafter."
The deadline to sign the forbearance agreement was 4 p.m. Monday, June 1.
OI says the initial deadline was 4 p.m. on May 26, just days after the town made its call for financial restructuring.
The decision to sign that document was “not made lightly,” according to the OI release.
OI chair Bill Hall said the organization concluded that it had no choice but to sign the forbearance agreement.
“Because of the loan being outstanding and the town deciding to call the loan, we don’t really have a choice,” he said during an interview.
“It was a town decision; it wasn’t our decision. The town forced the matter.
“This is the only way we can go because of the town’s legal action.”
“It was with surprise that the Olds Institute for Regional and Economic Development (OI) received a news release and legal documentation from the town’s legal solicitor on Friday, May 22, 2020, at 4 p.m. asking OI to sign a forbearance agreement by Tuesday, May 26, at 4 p.m.,” the OI news release said.
“Moving forward, it is hoped that the mayor, CAO, and council will acknowledge the benefits of having OI in our community and will engage in a positive dialogue with the OI board and its executive over the next 90 days to insure a win-win outcome,” it added.