Go-To Developments Holdings Inc. ("GTDH") and various related entities (collectively, the "Go-To Group") were placed in receivership on December 10, on application by the Ontario Securities Commission ("OSC"). Between 2016 and 2020, GTDH and Oscar Furtado, the founder and directing mind of the Go-To Group, raised almost $80 million from Ontario investors for nine Go-To real estate projects by selling limited partnership units in the respondents. The projects are not complete, and the investors’ funds remain outstanding. On December 6, the OSC issued two freeze directions which require Furtado to maintain and refrain from imperilling assets derived from investor funds and require RBC Direct Investing to maintain the assets in Furtado’s RBC Direct Account. The freeze directions were continued and KSV was appointed receiver over the Go-To Group on December 10. Counsel is Aird & Berlis for the receiver and Torkin Manes and Miller Thomson for certain of the respondents.
665-671 Sheppard Avenue West Ltd., the owner of four adjoining parcels of land comprised of four unoccupied single family homes with frontage on Sheppard Street in Toronto (the "Mortgaged Property"), had a receiver appointed on December 6, on application by Dorr Capital, owed approximately $8.1 million. The proposed development on the Mortgaged Property is a five-storey residential building with 56 units. The company defaulted on its interest-only payments to Dorr Capital and allowed a lien to be registered on title to the Mortgaged Property. Rosen Goldberg was appointed receiver. Counsel is Blaney McMurtry for Dorr Capital and Dickinson Wright for the receiver.
Portliving Farms (3624 Parkview) Investments Inc. and various related entities, the owners of the Beachside Motel, the Sunny Beach Motel and the Waterfront Inn in Penticton, British Columbia, had a receiver appointed on November 29, on application by Prospera Credit Union, owed approximately $4.99 million. The Bowra Group was appointed receiver. Counsel is BHL Vancouver for the receiver.
Elcano Exploration Inc., Elcano Exploration Ltd. & Elcano Energy Partnership, Calgary, Alberta-based oil and gas companies, were placed in receivership on November 24, on application by Tallinn Capital Energy Corp., owed over $6 million. It appears that Tallinn intends to make a credit bid for the companies' Manitoba assets in the receivership proceedings. The companies did not oppose the receivership application, but sought approval of an order permitting the receiver to execute an RVO term sheet and market an RVO transaction being proposed by the companies, which would be funded by their outside investor. The receivership order granted does not appear to address the relief sought by the companies, and no endorsement appears to have been released at this point. Grant Thornton was appointed receiver. Counsel is Bennett Jones for the companies.
CUDA Energy Inc., CUDA Oil and Gas Inc., CUDA Energy LLC and Junex Inc. (collectively, "CUDA"), a Calgary, Alberta-based group of oil and gas companies with assets in Alberta and the State of Wyoming, had a receiver appointed on November 18, on application by PwC as receiver of Bridging Finance Inc. ("Bridging"), owed approximately $57 million. Bridging has been providing financing to CUDA since 2018. CUDA has engaged in several formal refinancing processes and asset sale processes since 2019 in an attempt to fund working capital requirements related to its US assets or to refinance the loan agreement. On July 9, the operator of the US assets issued a default letter and filed a lien against CUDA in the amount of approximately US $2 million for a failure to pay unit expenses under the operating agreement. This constitutes an event of default under the loan agreement with Bridging. As a result of the foregoing and various other issues outlined in Bridging's materials, Bridging and PwC as receiver of Bridging had serious concerns about the ability of management to continue the operations of CUDA and develop a plan for the repayment of the outstanding indebtedness. Chapter 15 proceedings will also be commenced in the State of Wyoming. FTI was appointed receiver. Counsel is DLA Piper for PwC as receiver of Bridging Finance Inc.; Blakes for Tallinn Capital Energy Limited Partnership, by its general partner, Tallinn Capital Energy Corp. (a subordinate secured creditor); and Bennett Jones for FTI in it capacity as receiver of CUDA.
Jam Hospitality Inc. and XS Lounge and Grill Ltd., operating as the Radisson Hotel and Conference Centre at the Calgary Airport, were placed in receivership on November 18, on application by ATB Financial, owed approximately $17 million. PwC was appointed receiver. Counsel is Norton Rose for ATB Financial.
1438706 Ontario Limited o/a Motor Impact of Canada, a Toronto, Ontario-based company in the business of importing, exporting and distributing OE genuine auto parts for Korean and Japanese vehicles such as Hyundai, KIA, Toyota, Lexus, Scion, Nissan, lnfiniti, Acura and Subaru, was placed in receivership on November 15, on application by RBC. The company has been experiencing operating losses, which are worsening, since fiscal 2020. Fuller Landau was appointed receiver. Counsel is Minden Gross for RBC and Blaney McMurtry for the company.
2738283, 2738284 and 2738285 Ontario Inc. had a receiver appointed over certain real property on November 9 on application by PS Holdings 1 LLC, PS Holdings 2 LLC and PS Holdings 3 LLC, owed approximately $14.8 million. The property is in the process of being developed for residential, commercial and institutional uses, MNP was appointed receiver. Counsel is Fasken for the applicant, Sack (Q.C.) and Bogle Law for the respondents, TGF for the receiver, Diamond & Diamond for RPN Finance Corp. and 1938272 Ontario Limited and Aird & Berlis for SvN Architects + Planners Inc.
Riverside Professional Centre Inc., which owns a medical office building in Ottawa, had a receiver appointed over its properties on October 29, on application by The Manufacturers Life Insurance Company. The company has been in default of substantial municipal property tax obligations for two years. As a result of this failure, the company is in default not only of its agreements with Manulife, but also its ground lease for the building with The Ottawa Hospital, the lessor and owner of the land on which the building is situated. MNP was appointed receiver. Counsel is Miller Thomson for Manufacturers, Lerners for the company, Faskens for the receiver and BLG for The Ottawa Hospital.
Eco-Industrial Business Park Inc., Absolute Energy Resources Inc., Absolute Environmental Waste Management Inc., Lot 11 GP Ltd. and Lot 11 Limited Partnership (collectively, the "Absolute Entities"), which own certain lands in Edmonton, Alberta, had a receiver appointed on November 4 on application by Romspen Mortgage Limited Partnership and Romspen Investment Corporation. Each of the Absolute Entities guaranteed a loan given by Romspen to 3443 Zen Garden Limited Partnership ("Zen Garden") in 2018. The security includes mortgages over certain lands in Edmonton. Zen Garden defaulted on the loan in Texas and was petitioned into involuntary bankruptcy. An order has been made in the US bankruptcy proceedings allowing Romspen's claim in the amount of approximately USD $96.7 million. MNP was appointed as interim monitor in 2020. However, since then, the Absolute Entities have incurred property tax obligations that have resulted in the City of Edmonton issuing Notifications of Public Auction for the Edmonton lands, with the auction set to take place on November 25, 2021. MNP was appointed receiver. Counsel is BLG for Romspen and Dentons for the Absolute Entities.