BCSC

Settlements

WILLEM KERKHOFF [Sec. 161 & Agreed Stmt]

BCSECCOM #:	Document Type: Sec. 161 & Agreed Stmt
Published Date: 1997-09-12	Effective Date: 1997-09-03
Details:

IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF WILLEM KERKHOFF

Order Under Section 161

WHEREAS an Agreed Statement of Facts and Undertaking was executed by Willem Kerkhoff (“Kerkhoff”) and the Executive Director, a copy of which is attached hereto as Schedule “A” (the “Agreement”);

NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, orders, BY CONSENT, that:

1. pursuant to section 161(1)(d) of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”), Kerkoff is prohibited from becoming or acting as a director or officer of any reporting issuer or of any issuer that has distributed, or proposes to distribute securities without a prospectus by relying on the exemptions contained in sections 128(a), 128(b), or 128(c) of the Securities Rules, R.B.C. Reg. 194/97, and 74(4) of the Act, for a period ending on the later of:

(a) the date Kerkhoff satisfies his obligation to pay the sum of $15,000 as described in paragraph 3 of the Agreement; and

(b) ten years from the date of this Order.

DATED at Vancouver, British Columbia, on September 3rd, 1997.

Paul C. Bourque
Executive Director

Schedule “A”

IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF WILLEM KERKHOFF

Agreed Statement of Facts and Undertaking

The following agreement has been reached between Willem Kerkhoff and the Executive Director:

1. As a basis for the orders and undertakings referred to below, Willem Kerkhoff acknowledges the following facts as correct:

(a) Gibbins Estates Limited (“Gibbins”) (formerly Kerkhoff Land Investments Corporation) is a non-reporting issuer incorporated in British Columbia under the Company Act, R.S.B.C. 1996, c. 62 (the “Company Act”). Willem Kerkhoff (“Kerkhoff”) was a director and the president of Gibbins from November of 1993 until 1995;

(b) Gibbins proposed to develop a real estate project (the “Project”) on two parcels of land at 3205 Gibbins Road, Duncan, British Columbia (the “Gibbins Property”) in 1994;

(c) Gibbins raised $3.5 million to finance the project by selling 350 debenture units at $10,000 per unit to 101 investors (the “Debenture Holders”) between January 3, 1994 and July 8, 1994;

(d) Gibbins did not issue a prospectus to qualify the distribution of the debentures under section 42 of the Securities Act, S.B.C. 1985 c. 83 (the “Old Act”) (now section 61 of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”)). Instead, Gibbins relied on the sophisticated purchaser exemption to section 42 of the Old Act contained in what was then section 117(b) of the Securities Regulation B.C. Reg. 270/86 (the “Old Regulation”) as amended (now section 128(b) of the Securities Rules, R.B.C. Reg. 194/97) (the “Rules”);

(e) Gibbins prepared an offering memorandum dated January 1, 1994 (the “Offering Memorandum”). The Offering Memorandum was signed by Kerkhoff and Malcolm Hopkins, and was filed with the British Columbia Securities Commission (the “Commission”) on May 26, 1994;

(f) Subsequent to signing the Offering Memorandum, Peter Kerkhoff renegotiated downwards the price of the Gibbins property by $125,000 (the “Payment”). The Payment was initially deposited to Gibbins’ account and subsequently transferred, with Kerkhoff’s knowledge, to a company controlled by Kerkhoff, Peter Kerkhoff and Malcolm Hopkins. These transactions were not disclosed to the Debenture Holders, and the Payment was not made available to them;

(g) The Offering Memorandum was not in the required form because it contained the following material errors (the “Errors”):

(i) the Offering Memorandum inaccurately described the properties as 12.33 acres in size when in fact they were approximately 10 acres in size. The Offering Memorandum also failed to indicate that the properties were divided by a two acre right-of-way that was separately titled and owned by Fletcher Challenge Canada Ltd. (“Fletcher Challenge”);

(ii) The Offering Memorandum failed to disclose that the payee of the 5% real estate commission ($65,000) was to be the Kerkhoff Development Corporation;

(iii) The Offering Memorandum was not amended to reflect the Payment; and

(iv) The Offering Memorandum omitted reference to continuous reporting obligations which is required by item 15 of Form 43;

(h) As a result of the Errors, the exemption to the prospectus requirement contained in section 117(b) of the Old Regulation (now section 128(b) of the Rules) was not available to qualify the distributions of the debentures and therefore Gibbins breached sections 20 and 42 of the Old Act (now sections 34 and 61 of the Act) by causing securities to be distributed without registration and without a prospectus;

(i) By failing to retain the Payment in Gibbins’ account, Kerkhoff, as the president and a director of Gibbins, breached his obligations as contained in sections 118 and 135 of the Company Act.

2. Kerkhoff consents to an order by the Executive Director (the “Order”) that:

(a) under section 161(1)(d) of the Act, that he is prohibited from becoming or acting as a director or officer of any reporting issuer or of any issuer that has distributed, or proposes to distribute securities without a prospectus by relying on the exemptions contained in sections 128(a), 128(b) or 128(c) of the Rules and section 74(4) of the Act, for a period ending on the later of:

(i) the date Kerkhoff satisfies his obligation described in paragraph 3, below, including any accrued interest; and

(ii) ten years from the date of the Order.

3. Kerkhoff undertakes to pay the Commission the sum of $15,000 in accordance with the following payment schedule:

(a) $5,000 on or before September 30, 1997;

(b) $2,500 on or before September 1, 1998;

(d) $2,500 on or before September 1, 2000; and

(e) $2,500 on or before September 1, 2001.

and on the terms set out in a Promissory Note executed by Kerkhoff in favour of the Commission.

4. Kerkhoff has filed an affidavit with the staff of the Commission outlining his current financial status. If the Commission subsequently determines that the affidavit is materially inaccurate, Kerkhoff acknowledges that the entire balance of unpaid sums referred to in paragraph 3 above will become due and payable forthwith.

DATED at Vancouver, British Columbia, on August 29, 1997.

S. Royal )
Witness Signature )
)
S. Royal )
Witness Name ) Willem Kerkhoff
5432 Highroad Crescent )
Chilliwack )
Address )
)
Secretary )
Occupation

DATED at Vancouver, British Columbia, on September 3rd, 1997.

Paul C. Bourque
Executive Director