189 Dundas Street West, owner of the property municipally known as 189 Dundas Street West in Mississauga, Ontario, had its property placed in receivership on May 3 on application by West End Motors and Trailer Park Limited (collectively "WEM"). WEM sold the property to 189 in February 2017 for $12.1MM, a sale partially financed by a $9.0MM vendor-take-back mortgage. A second mortgage of approximately $5.7MM was registered over the property on the same date, with those proceeds intended to finance both the purchase of the property and soft costs to be incurred prior to the construction financing of the condominium project. 189, which the applicants allege appears to be connected to Fortress Real Developments, began missing payments on the VTB mortgage in March 2018 and a demand for repayment was made shortly thereafter. The second mortgagees made payments against the first mortgage in order to protect their position but ultimately, after several delays and over the objections the second mortgagees, a receivership order was granted. Rosen Goldberg was appointed receiver. Counsel is Blaney McMurtry for the applicant, Laishley Reed for the company, Dickinson Wright for the receiver and Corsianos Lee for the second mortgagees.
2507448 Ontario, a Toronto, Ontario-based company had its property municipally known as 581 Wellington Street West in Toronto, Ontario placed in receivership on May 3 on application by First Source Financial Management, owed approximately $3.5MM. The property is currently under construction, although construction has stalled since approximately July 2018 due to the company's inability to obtain additional financing; a second and third mortgage, together totaling approximately $2.8MM, are also registered against the property. The company's principal, Del Terrelonge, advises that he requires an additional $600.0M in further financing in order to complete his intended construction project. RSM was appointed receiver. Counsel is Paliare Roland Rosenberg Rothstein for the applicant and Torkin Manes for the receiver.
Eco Energy Home Services, a Toronto, Ontario-based provider of HVAC units and other home appliances and services, was placed in receivership on April 3 on application by EcoHome Financial ("EcoHome"), owed approximately $1.6MM. EcoHome provided financing to the debtor's customers pursuant to a consumer lease program agreement. In the spring of 2017, EcoHome learned that the debtor was in breach of this agreement by, among other things, accepting certain trust funds from customers and failing to remit the funds to EcoHome. Efforts to confirm the exact amounts owing and enter into a payment plan were unsuccessful, leading to the decision by EcoHome to enforce its security. RSM was appointed receiver. Counsel is Aird & Berlis for the applicant and Gowling WLG for the debtor.
Skyventure Whitby, the operator of an iFLY indoor skydiving facility in Whitby, Ontario, filed an NOI on March 6, listing 10.7MM in liabilities, including $6.9MM to National Bank and $1.5MM to FTQ. Grant Thornton is the proposal trustee.
York Rio Resources and Brilliante Brasilcan Resources, two Ontario-based corporations, had all of its funds placed in receivership on March 6 on application by the OSC. These funds, which are worth approximately $5.2MM, were recovered by the OSC relating to investment schemes by the two companies. Between May 2004 and October 2008, various companies were found to have violated the Ontario Securities Act in raising about $180.0MM from investors. Other than two respondents who entered into approved settlement agreements, the OSC concluded that the remaining companies had violated the Act by, amongst other things, (1) trading in securities without registration and filing a prospectus; and (2) engaging in a course of conduct they knew or ought to have known would perpetrate a fraud on investors. In a sanctions decision released in 2014, an OSC panel ordered that the companies fully disgorge certain amounts, some on a joint and several basis with York Rio and Brilliante. The OSC now wishes to proportionally distribute the proceeds to investors in York Rio and Brilliante securities. Farber was appointed receiver. Counsel is Gowling WLG for the OSC.
Hutchens et al., a group of individuals who allegedly orchestrated a fraudulent loan scheme, was placed in interim receivership on February 28 on application by Gary Stevens, Linda Stevens and 1174365 Alberta ("117 Alberta") (collectively, the "Applicants"). Gary and Linda, residents of Alberta, are the sole shareholders of 117 Alberta. The Applicants sought a receivership order to protect their ability to enforce two final judgments against Tanya Hutchens and Sandy Hutchens from a US federal court in Pennsylvania. The Applicants were defrauded by the Respondents in a fraudulent scheme disguised as a financing enterprise for real estate transactions. In October 2014, the Applicants sought refinancing for mortgage loans on property they were developing in Saskatchewan. They were referred to Westmoreland Equity Fund, which required the Applicants to pay large advance fees for the financing they sought. Over the following months, Westmoreland reneged on its promises to provide financing, changing the amount it said it would loan from $13.9MM (CAD) to $7.5MM (CAD), on conditions Westmoreland knew the Applicants could not meet. The Applicants realized that Westmoreland was the front for a fraudulent scheme orchestrated by the Hutchenses. Westmoreland would first issue loan commitments that it could neither fund nor intended to. Then, it would create a pretext to find fault with the borrowers' loan applications, which it used to justify imposing further monetary conditions. Finally, Westmoreland would assert its victims had not satisfied these new conditions in order to terminate the loan application process, after which Westmoreland would keep all the monies advanced. The Applicants brought a claim against Westmoreland and the Hutchenses in the Pennsylvania State Court because the company was registered as operating in Pennsylvania. Farber was appointed interim receiver. Counsel is Necpal Litigation for the Applicants and Naymark Law for the interim receiver.
Bay Lawrence, which owns real property at 2013 Lawrence Avenue West, Toronto, Ontario, was placed in receivership on February 14 on application by the National Bank of Canada. BDO was appointed receiver. TGF is counsel to the applicant.
Reach For The Rainbow Ontario, a Toronto, Ontario-based charity serving children and young adults with developmental and physical disabilities, filed for bankruptcy on January 14. Grant Thornton is the bankruptcy trustee.
Donaldson & James and The Agency Employment Services, two Kitchener, Ontario-based related companies that are part of a united business enterprise providing staffing services and solutions to customers, as well as support services to other staffing businesses, filed NOIs on January 23, listing $105.0M in liabilities. Around fall of 2018, management discovered that the companies' former CFO had not been making HST remittances and was reporting artificially high cash flows and profits. After discovering this, the companies' ability to finance their new growth was restricted and their senior secured operating lender, TD, signalled it wanted to exist the parties' relationship. FundThrough took an assignment of TD's debt in January 2019 and immediately terminated the credit agreement and demanded repayment. The NOI filing occurred shortly thereafter, with FundThrough agreeing to provide the company with DIP financing during these proceedings. FundThrough also indicated a desire to acquire the companies by utilizing its debt to "credit bid" and, accordingly, FundThrough and the companies have entered into a stalking horse asset purchase agreement. Farber is the proposal trustee. Counsel is Chaitons for FundThrough, Loopstra Nixon for the companies, McMillan for the proposal trustee and Aird & Berlis for TD.
Confidence Tool & Mould Design, an Oldcastle, Ontario-based company, was placed in receivership on January 22 on application by BMO, owed approximately $6.0MM. BDO was appointed receiver. Counsel is Aird Berlis for the applicant and Miller Thomson for the receiver.