April 20, 2018
Building & Development Mortgages Canada (BDMC), a Richmond Hill, Ontario-based administrator of syndicated mortgage loans, had a trustee appointed over its assets following an application made by the Superintendent of Financial Services. Prior to February 1, 2018, BDMC brokered and administered investments in syndicated mortgage loans principally relating to development projects in which Fortress Real Capital or Fortress Real Developments were involved. Over $600.0MM has been invested in BDMC by over 11,000 individual investors, many of whom have invested significant portions of their savings in these loans. Following numerous complaints from investors regarding BDMC's activities and the performance of their investments, the Financial Services Commission of Ontario launched an investigation that ultimately led to a settlement agreement on January 31 under which FAAN Mortgage Administrators (FAAN) was appointed as the arm's length, independent manager of BDMC's business. FAAN has advised that BDMC has been struggling to make a number of important payments, including payroll, rent, and payments due under its administration agreement. Additionally, on April 13, the RCMP executed search warrants at BDMC's offices. For these and certain other reasons, FAAN determined that it was not prepared to continue to act without court protection and direction, as required. The Court has now formally appointed FAAN as trustee. Counsel is Aird & Berlis for the the Superintendent of Financial Services and Osler for the trustee.