1034179 B.C. Ltd., a British Columbia-based developer of a 66-unit rental property in Maple Ridge, British Columbia, obtained protection under the CCAA on February 4, listing approximately $22.0 million in liabilities, including $6.3 million to Canadian Western Bank. In April 2017, the company purchased the Maple Ridge property and began development with $3.8 million of purchase financing from its subordinate lenders. It was contemplated that construction would finish at the end of June 2018. By the fall of 2017, however, the company realized that construction was taking longer and costing more than initially anticipated. In the beginning of 2018, the company managed to secure an additional loan from its subordinate lenders as well as from CWB in order to complete construction of the property. Shortly after these financings, it became clear that the company could not complete construction or meet the monthly interest payments under its loan agreement with the subordinate lenders. In September 2019, CWB ceased to advance funds to the company and demanded payment for $6.3 million. The company proposed to CWB that it would seek relief under the CCAA so that interim financing could be obtained to complete construction of the development for the benefit of all stakeholders. The Bowra Group was appointed monitor. Fasken is counsel to the company.
AAA Windows and AAA Holdings, two related Calgary, Alberta-based corporations, were placed in receivership on January 27 on application by Canadian Western Bank ("CWB"), owed approximately $4.7 million. While AAA Holdings effectively operates as a real estate holding company with title to a building located in Calgary (the "Property"), AAA Windows operates from leased space on the Property as a supplier, manufacturer, and installer of windows and doors. The overall downturn in Calgary's economy during the last several years has negatively impacted AAA Windows' business and cash flow. The court granted CWB's application for a pre-pack sale of both companies' assets. Hardie & Kelly was appointed receiver. Counsel is Burnet, Duckworth & Palmer for the applicant and Parlee McLaws for the receiver.
Gestion Knighstbridge, a Montreal, Quebec-based residential real estate developer, was deemed bankrupt on January 9, listing $2.9 million in liabilities, including $373.6 thousand to RBC. The company had previously filed an NOI on November 15. The company attributes its financial difficulties to numerous factors that negatively impacted its cash flow, including delays in obtaining approvals from municipal authorities which postponed the launch of ongoing projects; an increase in construction costs and shortage of skilled labour; and cost overruns on certain projects. Richter is the bankruptcy trustee.
IEC Ltd., Audeamus Capital Corp. and certain other entities related to the Strategic Group, one of Calgary, Alberta's largest real estate companies, had their properties placed in interim receivership on application by a group of the companies' lenders. The companies obtained protection under the CCAA on December 10, attributing their financial difficulties to the extended slump in the Canadian energy market and its effect on the Calgary real estate market. The companies' request to be granted creditor protection past the initial 10-day stay was opposed by the applicants in part on the basis that they no longer had confidence in the management of the companies and wanted a receiver appointed to safely manage and preserve the properties, ensure rents are collected and not co-mingled amongst the various companies and ensure operational expenses are paid by the appropriate companies. Alvarez & Marsal was appointed interim receiver. Counsel is McCarthy Tétrault for the company, Dentons for the interim receiver, Norton Rose Fulbright for the CCAA monitor Hardie & Kelly, BLG for BMO and certain other lenders, Blakes for Sun Life, Cassels for MCAP and BDC, McMillan for RBC, McLennan Ross for CWB, Brownlee for Canada ICI and SBI Canada Bank, Lawson Lundell for Vancity Community Investment Bank and Centurion Mortgage Capital Corporation, Fasken for Fiera, Torys for Connect First Credit Union, Gowling WLG for CIBC, Stikeman Elliott for IMC and Computershare, Osler for TELUS Pension Master Trust, Bennett Jones for Trez Capital and Parlee McLaws for Equitable Life.
IEC Ltd., Audeamus Capital Corp. and certain other entities related to the Strategic Group, one of Calgary, Alberta's largest real estate companies, obtained protection under the CCAA on December 10. The company has attributed its financial difficulties to the extended slump in the Canadian energy market. Vacancy rates in commercial office space in Calgary have soared since 2015 due to companies ceasing operations, engaging in headcount reductions and undertaking cost cutting measures. These vacancies have been compounded in the last two years by a large amount of new office space being added to the Calgary market, as well as increases in the property taxes being charged by the city. To put things in perspective, Calgary's downtown office vacancy rate is estimated to be 24.6% vs. Toronto's 2.2%. These changing market conditions have reduced the company's revenues and materially reduced the market value of many of its rental assets. Believing that there is no macro-economic turnaround on the horizon, the company sought creditor protection and intends to restructure its rental portfolio. Hardie & Kelly is the monitor. Neil Narfason was appointed CRO. Counsel is McCarthy Tétrault for the company and Norton Rose Fulbright for the monitor.
Gestion Knightsbridge, a Montreal, Quebec-based residential real estate developer, filed an NOI on November 15, along with certain related companies. Richter is the proposal trustee.
TamTan Inc., a real estate holding company whose primary asset is a commercial property in Scarborough, Ontario, along with related party EZ Food Group, was placed in receivership on October 16 on application by Roynat, owed approximately $2.4 million. An RCMP investigation into the company's affairs resulted in the federal prosecution of the company's principal, and in February 2019, a restraint order was registered against the property on the grounds that the Attorney General alleges that the property is an offence-related property. Certain of the company's bank accounts were also frozen, and it soon lapsed into default under its loan agreement with Roynat. Roynat gave the company an opportunity to market and sell the property and repay its obligations, but multiple attempts to sell the property have failed and Roynat has lost confidence in the company's ability to facilitate a sale outside of a court process. Spergel (GRIP) was appointed receiver. Blakes is counsel for the applicant.
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.