2346123 Ontario Inc. et al., Receivership

2346123 Ontario Inc. et al. (“234”), a real estate development company which owns property at 3211 Highway 115/35 in Clarington, Ontario, was placed into receivership on December 14, on application by C&K Mortgage Service Inc., owed over $4.7 million on a loan where no payments have been made since August. A Tim Hortons was supposed to be built on the property, but the tenant terminated the agreement due to construction delays. 234 later replaced the Tim Hortons with an A&W, but the rent payable by the A&W tenant is substantially less than what the Tim Hortons tenant was to have paid. The loss of the Tim Hortons has also had a significant adverse impact on the income potential and underlying value of the property. In addition, 234 incurred significant cost overruns with its general contractor Clarkway Construction in revising the building to suit A&W’s requirements, resulting in Clarkway filing a construction lien against the property. Construction is at a standstill as no lender will advance funds to complete the project in the face of the lien, and A&W threatened to be lost as a tenant unless a receiver was appointed. Rosen Goldberg was appointed as receiver. Counsel is Dickinson Wright for C&K Mortgage Services.

By: Dina Milivojevic