December 21, 2018
244931 Ontario, a special purpose entity wholly owned by Bondfield Construction, was placed in receivership on December 21 on application by BMO, as administrative agent for a syndicate of lenders, owed approximately $230.6MM. The company has no significant assets other than certain contracts relating to the St. Michael's Hospital Redevelopment Project. Due to various defaults committed by Bondfield, the contractor, there have been delays in the construction of this project, which involves building a new 17-storey patient-care tower at the corner of Queen and Victoria Streets in Toronto, Ontario. In addition, there are a number of construction liens registered on the project site, and as a result of Bondfield's financial challenges, the project has effectively come to a halt. Notwithstanding these default events, the company has not taken any steps to declare Bondfield in default under their construction contract or to make demand under the performance bond. In November 2018, the hospital delivered a default notice. With the hospital's support, BMO has been attempting to work consensually with Zurich Insurance, the project's surety, to restart and complete the project. However, BMO has been advised by Zurich that it cannot make demand on the performance bond unless it first "steps in" to the project, a step which may create additional liability for the lenders. Alvarez & Marsal was appointed receiver to facilitate the prompt resumption of the construction work and completion of the project. Counsel is Chaitons for the applicant, Osler for Bondfield, GSNH for Zurich Insurance, McCarthy for the hospital, Blakes for the receiver and Cassels Brock for Infrastructure Ontario. EllisDon is prepared to serve as the replacement contractor to complete the project.