Despite all that, Homburg suggested, Pollyanna-like, to one unhappy investor at the company’s 2010 annual meeting that she buy even more Homburg stock now that it was cheaper.
In the midst of all this corporate turmoil, Homburg also continued to play his larger than-life role as generous philanthropist. In July 2009, he announced he was personally donating $2 million to Charlottetown’s Fathers of Confederation Building Trust — in part to build a pedway to link the Confederation Centre of the Arts to his new downtown hotel project but also to get his name over the entrance to the centre’s iconic mainstage, where Anne of Green Gables has delighted audiences for generations.
Homburg’s corporate stage management didn’t go nearly as well. In June 2009, he announced plans to restructure the company by spinning off its real estate assets into five new entities, including Homburg Canada Real Estate Investment Trust, which Homburg would describe as “one of Canada’s largest and best quality” REITs.
While selling Homburg Invest assets to the REIT did help reduce its crushing debt, it also, in the process, hived off many of the company’s best property assets, making Homburg Invest itself an even less attractive investment.
In March 2011 — just a month before the Dutch financial regulator, who’d been raising corporate governance alarms for a year, formally ordered Homburg Invest to remove its boss and largest shareholder as a company “decision-maker” — Homburg preemptively announced he would be stepping down as chair and CEO to “focus on a privately-owned global real estate venture.”
A month later, Homburg unexpectedly offered to buy up all the outstanding shares in Homburg I vest and take it private, a ploy that would have put it, and Homburg himself, beyond the clutches of Dutch regulators.
But that plan quickly died when key investors, including Clearwater’s John Risley, dismissed the $3.25 a share offer as “way too low” and raised pointed questions about the company’s lack of transparency.
After that, what had become a tangled mess got even more so. Relations between Homburg and those he’d put in charge when he left deteriorated. There were accusations and counteraccusations, lawsuits, name changes (Homburg Canada REIT became Camarc REIT in order to “put some distance between itself and troubled Homburg Invest,” and then was promptly taken over by a competitor).
Finally, on September 9, 2011, a battered Homburg Invest, no longer on good terms with its major shareholder, applied for creditor protection in order to try to restructure. It made the move, in part, to “address the primary concerns” of the Netherlands Authority for Financial Markets, which was threatening to revoke the company’s investment licence. It eventually did so anyway.
By October, the company’s court-appointed monitor reported Homburg Invest had debts of $2 billion. Its assets, which had topped $600 million at the end of 2008, were now worth just $57 million. By that point, the Toronto Stock Exchange had already halted trading in shares of Homburg Invest and initiated a review to determine if the stock should be de-listed.
The rapid rise and faster fall of Richard Homburg seemed complete.
It was over . . . Or is it?
THE QUALITIES that brought Richard Homburg to the top of his entrepreneurial game — vaulting ambition, obsessive passion, massive ego and the kind of pride that goes before a fall — are also, of course, what brought him crashing to earth. They are, in fact, the essential qualities of any successful entrepreneur.
Richard Homburg is still only in his early sixties. He’s not without assets. In early January, a Montreal court approved the terms of a deal to settle a lawsuit between Homburg Invest and its former CEO that gives Richard Homburg $10.5 million in cash, $7.1 million in promissory notes and title to two condos valued at $3.1 million. No one believes he’ll end up in a food bank anytime soon — and his wounded ego will almost certainly ache for vindication.
When I ask the investment advisor whether Homburg can make a comeback, he is initially dismissive. “He’s essentially done,” he says. “The whole thing has become too much of a soap opera.” But then he pauses, considers. “Richard has always worn those rose-coloured glasses. He’ll probably look at this and say, this is just the way the world works. Shit happens. And he’ll move on. Who knows?”
The little Dutch boy, who used the ache of a dismissive step-father to stoke his overweening ambitions, has not disappeared.
We may not have heard the last of Richard Homburg.
A note on sources: Since Richard Homburg didn’t respond to my requests for an interview, I’ve had to draw on other sources for this article. Most of the biographical information about him originally appeared in two excellent profiles, one by Canadian Press reporter Michael Tutton, the other in the defunct Halifax Daily News, both published at the pinnacle of Homburg’s success. The best day-to-day coverage of Homburg’s corporate comings and goings appeared on the Halifax-based website allnovascotia.com. And, of course, I talked extensively with people who know Homburg and his companies intimately: associates, investors, investment advisors and developers, none of whom would be quoted directly in the article.