Starmor Developments, a Calgary, Alberta-based real estate holdings company, filed for bankruptcy on August 26, listing $917.0 thousand in liabilities. Grant Thornton was appointed bankruptcy trustee.
3070 Ellesmere Developments, an Ontario corporation that owns a vacant parcel of land municipally known as 3070 Ellesmere Road, Scarborough, Ontario, filed an NOI on August 20, listing $29.4 million in liabilities. The property was purchased in January 2014 with the intention of developing a 26-storey residential condominium tower. Within 6 months, the company had sold 80% of the units and needed a partner who could assist in implementing the planning and construction aspects of the project. A joint venture agreement was struck with 2518358 Ontario Inc. ("Rise"). The company's relationship with Rise has broken down, with the company alleging that Rise failed to inject the necessary equity and failed to advance the project, including securing construction financing and commencing construction. The company also alleges that Rise has blocked the company's attempts at advancing joint venture discussions with alternative partners. The company intends to sell the property through a stalking horse sales process while under creditor protection. Co-Stone Development and Campus Suites together are acting as the stalking horse purchaser. Crowe Soberman was appointed proposal trustee. FAAN Advisors is the proposed Chief Restructuring Advisor. Cassels Brock is counsel for the company.
Ideal (JS) Developments, a single purpose corporation related to Markham, Ontario-based real estate developer, Ideal Developments, was placed in receivership on August 1 on application by Vector Financial Services and Downing Street Financial, together owed approximately $15.4 million. The corporation owned vacant land in Richmond Hill, Ontario on which it was planning to develop a 96 unit townhouse project. Construction had not yet begun when the company's loan with the applicant matured in October 2018. Despite several extensions, the company has been unable to obtain construction financing or take-out financing. Fuller Landau was appointed receiver. Counsel is Blaney McMurtry for the applicant, Friedman Law for the company and Aird & Berlis for the receiver.
Ideal (BC) Developments, a single purpose corporation related to Markham, Ontario-based real estate developer, Ideal Developments, was placed in receivership on July 19 on application by First Source Financial Management and Kingsett Mortgage, together owed approximately $13.1MM. The corporation owned vacant land in Richmond Hill, Ontario on which a development was planned that would consist of 24 stacked townhouses and 47 front loaded townhouses. In late 2018, the company failed to make its scheduled interest payments and has been unable to repay the loan, despite several extension agreements. KSV was appointed receiver. Counsel is Lax O'Sullivan Lisus Gottlieb for the applicants, Friedman Law for the company and Paliare Roland for the receiver.
Ceana Sunridge, a Calgary, Alberta-based property developer, was placed in receivership on July 3 on application by Hillsboro Ventures, owed over $8.0MM. The company's principal business was the development of a 45,000 square foot, five building, retail condominium project in Northeast Calgary. Since approximately August, 2018, there has been no material progress on the project, as the company's lenders have refused to provide additional financing draws without equity injections that were previously agreed to. Alvarez & Marsal was appointed receiver and is tasked with overseeing the completion of the project. Counsel is Dentons for the applicant, Low, Glenn & Card for the company, Torys for the receiver and Burnett, Duckworth & Palmer for the first lien lender, ConnectFirst Credit Union.
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.