2039882 Ontario Limited o/a Shelter Cove, Receivership

2039882 Ontario Limited o/a Shelter Cove, which operates a land lease waterfront community on owned land on the north shore of Lake Erie, was placed in receivership on July 19 on application by KHL Investments USA Inc., its senior secured lender.

The company previously obtained CCAA protection on January 18 over a competing application by KHL to appoint a receiver, though KHL ultimately provided a DIP loan in the CCAA proceedings.

A SISP in the CCAA proceedings failed to yield a qualified bid, and a subsequent offer to purchase the real property was withdrawn. As a result, KHL is no longer willing to fund the CCAA proceedings, but is willing to fund a receivership.

In addition, the company has recently developed an abatement plan accepted by the Ministry of Environment, Conservation and Parks with respect to treatment plants relied on by residents living in the community for water and sewage services. The receiver will be responsible for ensuring compliance with the abatement plan with the assistance of an experienced project manager.

Fuller Landau is the receiver.

Counsel is Lerners for KHL, Aird & Berlis for the receiver and Reconstruct for the company.