Paserium Corporation, owner of a series of condominium units in a mixed retail/commercial/residential project in Calgary, Alberta, was placed in receivership on June 13 on application by RBC, owed approximately $7.4MM. After a series of defaults in 2018, RBC intended to proceed by way of a foreclosure proceeding but soon realized that this alone would be insufficient to adequately protect the bank's security. Shortly after listing the properties for sale, RBC learned that the condominium was facing significant building repair issues. Additionally, one of the condo units that Paserium owns has been subdivided into approximately 70 rooms and is operated by Paserium as a business centre with shared office services and staff. RBC therefore decided that it would be best to appoint a receiver that could serve on the condo board and evaluate, and potentially operate, the business centre while the units were marketed for sale. Grant Thornton was appointed receiver. BLG is counsel for the applicant.
Rockmore Development, a Calgary, Albert-based real estate company that supports hospitality, warehouse and retail industries, was placed in receivership on February 11 on application by ATB Financial, owed approximately $6.0MM. To secure the amounts owing to ATB, the company granted ATB certain security in respect of the Windgate by Wyndham Airdrie, a hotel owned and operated by the company. In September 2018, the company engaged Colliers International Hotels as a sales agent for the hotel. Colliers' efforts to sell the hotel generated considerable interest, including 47 groups that eventually signed confidentiality agreements in respect of the sale as of January 2019. To date, the company has received two letters of intent from prospective purchasers for the hotel. Grant Thornton was appointed receiver. Blakes is counsel to the applicant.
LREIT Holdings 34, which owns lands and premises known as the "Woodland Park" residential building located at 230 Wilson Drive, Fort McMurray, Alberta, had its property placed in receivership on February 28 on application by Connect First Credit Union. Alvarez & Marsal was appointed receiver. Fasken is counsel to the applicant.
Forme Development Group, a Markham, Ontario-based commercial and residential real estate development group specializing in low-rise, high-rise, mixed-use and hospitality developments, had its NOI proceedings converted into a single CCAA proceeding on November 30, listing over $220.0MM in mortgage debt. The company, which currently owns 18 development projects primarily located in the GTA, has been experiencing increased stress on its cash flows for the last year, which has led to occasional late and missed debt payments. In recent months, however, the company has encountered serious liquidity issues due to a slowdown in the real estate market in the GTA, as well as delays in planning and development of several projects resulting from municipal delays. Consequently, the company can no longer advance its projects since it does not have the liquidity to pay development costs. KingSett Mortgage Corporation will be providing the company with $5.0MM in advance interim financing for certain of the projects. The company intends to finalize a sales process for the projects. KSV Advisory was appointed monitor. Counsel is GSNH for the company, Bennett Jones for the monitor and Goodmans for KingSett Mortgage Corporation.
2508342 Ontario, owner of real property located at 57 Matthew Street in Marmora, Ontario that consists of an Ultramar branded gas station and Square Boy Pizza franchise, was placed in receivership on November 28 on application by BMO, owed approximately $1.9MM. In June 2017, BMO was advised by the company's VP, Roopinder Bahl, and director, Jannette Saberon, that they had experienced a marital breakdown and separated. This discord allegedly impacted the business relationship between Mr. Bahl and the company's secretary, Varun Sharma, leading him to exit the active operation of the business. Ms. Saberon eventually took over operation of the gas station and pizza restaurant, but since she did not want to continue the business long-term, she put the property and business up for sale in early 2018. Compounding these issues is the opening of a new Esso gas station a kilometer away from the company's property. Given that Marmora is a small town and the Ultramar station is dependent on drive-by business, it is expected that the Esso station will negatively impact the company's earnings. msi Spergel was appointed receiver. Chaitons is counsel to BMO.
58, 76 and 82 Old Kennedy Development, three related companies owning development properties in Markham, Ontario, filed NOIs on October 26. KSV was appointed proposal trustee. Counsel is GSNH for the company and Bennett Jones for the proposal trustee.
Hillview Park Condominium, a 214-unit townhouse-style condo complex located in Fort McMurray, Alberta that is one of the biggest rebuilds after the May 2016 wildfire, was placed under administration on September 20 on application by the owners of the condo corporation. Homeowners were supposed to be back in their homes by February 2018, but significant delays on the rebuild arose. Builder Viceroy Construction was removed from the project and subsequently filed a lawsuit against the condo corporation, alleging its contract was wrongfully terminated. The condo corporation filed a counter lawsuit alleging that Viceroy was negligent in ensuring work was free from defects and completed on time. PwC, who was appointed administrator, will take charge of the reconstruction project, with duties to review and assess proposed payments, monitor the reconstruction budget and manage the litigation commenced by or against the condo corporation. Counsel is Field Law for the applicant, McLennan Ross for the administrator, Witten for TD, BMO, RBC and CIBC, Duncan Craig for Genworth and BNS, Lintott Law for Canada Guaranty Mortgage Insurance Company, Guardian Law for certain owners and BLG for CMHC.
1041951 Alberta (formerly Prestigious Properties), a Canmore, Alberta-based real estate investment company, filed for bankruptcy on July 30, listing $9.8MM in liabilities, including $4.0MM to 1536466 Alberta. EY is the bankruptcy trustee. Dentons is counsel to 1536466 Alberta.
Kolsy Homes, a Saskatoon, Saskatchewan-based company that acquires and develops lands in Saskatchewan, along with Rivairo Capital Corporation, a related company, filed for protection under the CCAA on July 9. The sole asset of Rivairo is 5.4 acres of land in Airdrie, Alberta that has been subdivided out for the development of townhomes and condos (the "Rivairo Project"). Based on Rivairo's aggregate secured indebtedness of $9.4MM, the current value of the Rivairo Project, if sold in a forced-liquidation scenario, would be insufficient to pay all of the company's secured obligations that are due and owing. Moreover, the company currently does not have enough funds to pay any amount of the $3.6MM it owes to unsecured creditors. Similarly for Kolsy, the aggregate value of its assets - which is approximately $3.3MM - would be insufficient to pay its secured obligations as they become due. The only income that Kolsy receives is $7,600 in annual rent on the 143.6 acres of land that it owns in Corman Park. During the CCAA proceedings, KV Capital will be providing $600.0M in interim financing. Counsel is The W Law Group for the companies, MLT Aikins for The Bowra Group and Bishop & McKenzie for KV Capital.
2120 Dundas Holdings and several other related real estate holding companies, were placed in receivership on June 19 on application by BDC. The companies own properties municipally known as 9160 Bayview Avenue, Richmond Hill Ontario (Bayview Medical Centre) and 2120 Dundas Street East, Mississauga, Ontario, from which a banquet hill by the name of Lviv Castle operates. In September, 2017, following an internal investigation, BDC confirmed that a number of the companies and their principals falsified documents and made material misrepresentations to BDC in connection with their loan applications. Additionally, the companies have allowed substantial property tax arrears to accrue on the properties. BDO was appointed receiver. Counsel is Chaitons for the applicant and Aird & Berlis for the receiver.