Real Estate

Ideal (BC) Developments Inc., the owner of certain vacant properties in Richmond Hill, Ontario, was placed in receivership on December 17, on application by C&K Mortgage Services Inc. and Canadian Western Trust Company, owed approximately $15.5 million. The properties are an assembly of development land which the company has been developing for construction of a residential community, consisting of 23 stacked townhomes and 49 freehold townhomes, although construction has not yet begun. The applicants' loan to the company matured on November 1 and has not been repaid. Alvarez & Marsal was appointed receiver. Counsel is Chaitons for the receiver, Dickinson Wright for the applicants and Friedman Law Corporation for the company.

Go-To Developments Holdings Inc. ("GTDH") and various related entities (collectively, the "Go-To Group") were placed in receivership on December 10, on application by the Ontario Securities Commission ("OSC"). Between 2016 and 2020, GTDH and Oscar Furtado, the founder and directing mind of the Go-To Group, raised almost $80 million from Ontario investors for nine Go-To real estate projects by selling limited partnership units in the respondents. The projects are not complete, and the investors’ funds remain outstanding. On December 6, the OSC issued two freeze directions which require Furtado to maintain and refrain from imperilling assets derived from investor funds and require RBC Direct Investing to maintain the assets in Furtado’s RBC Direct Account. The freeze directions were continued and KSV was appointed receiver over the Go-To Group on December 10. Counsel is Aird & Berlis for the receiver and Torkin Manes and Miller Thomson for certain of the respondents.

1725859 Ontario Inc., 1941275 Ontario Ltd., and 1941276 Ontario Inc., which own a condominium unit in Toronto, a residential property in Brampton and a commercial property in Brampton, respectively, had a receiver appointed on November 1, on application by DUCA Financial Services Credit Union Ltd. DUCA brought the receivership application as a result of various defaults in the companies' obligations to DUCA, including that the companies have granted subsequent charges over the properties without the knowledge or consent of DUCA, and another creditor has commenced enforcement proceedings in relation to one of the properties. Spergel (GRIP) was appointed receiver. Counsel is Harrison Pensa for the applicant and Aird & Berlis for the receiver.

Axess Pickering Ltd., the owner of real property located at 1525 Pickering Parkway in Pickering, Ontario (the "Property"), had a receiver appointed over all of its assets on October 12, on application by C & K Mortgage Services Inc. (carrying on business as Rescom) and 975393 Ontario Inc., the company's senior secured creditors. The Property is a vacant 1.273 acre parcel which is being developed for construction of 336 units, in two residential condominium towers and approximately 26,000 square feet of office/restaurant space. On September 1, there was a default in the payment of interest under the charge on the Property, and no payments have been received since that date. Alvarez & Marsal was appointed receiver. Counsel is Dickinson Wright for the applicants.

Mohawk Trail Properties Inc., 2317159 Ontario Inc., and Mohawk Inn & Suites Management Inc., a related group of primarily land holding companies based in Toronto and Milton, Ontario, had a receiver appointed over their assets on August 3, on application by Cortland Credit Lending Corporation as agent for certain lenders. Mohawk Trail Properties Inc. was the borrower under the loan agreement, while 2317159 Ontario Inc. and Mohawk Inn & Suites Management Inc. provided guarantees. Starting in June 2019, as a result of certain material breaches and defaults (including monetary defaults) under the loan agreement, the parties entered into a series of forbearance agreements. However, the companies have been unable to repay the loan and, as of July 23, 2021, owed approximately $17 million to the lenders. A sale process for the companies' assets was approved on the same day that the companies were placed in receivership. PwC was appointed receiver. Counsel is Dentons for Cortland Credit Lending Corporation and Stikeman Elliott for the companies.

Sunrise Acquisitions (Hwy 7) Inc., the owner of the Unionvillas townhome development project in Markham, Ontario (the "Project"), was placed in receivership on June 9 on application by KingSett Mortgage Corporation ("KingSett"), owed approximately $2 million. Since 2015, KingSett has provided senior secured financing to the company to enable the development of the Project, which comprises 52 built townhomes. In addition to KingSett, the other primary financing source for the Project was a syndicated mortgage financing arranged by Fortress Real Developments Inc. and administered through Sorrenti Law. In May 2021, the company defaulted under its loan facility with KingSett by failing to make a required interest payment, which remains unpaid to date. KingSett has lost faith in the company's management and wishes to exercise its rights to appoint a receiver to market and sell the company's assets and properties. KSV was appointed receiver. Counsel is Bennett Jones for the receiver, Cassels for the applicant, and Osler for FAAN Mortgage Administrators Inc., in its capacity as trustee of Sorrenti Law.