Brampton development placed into receivership over $26.3 million debt amid questions over second mortgage

RSG Mayfield Inc., a Greater Toronto Area real estate developer, was placed into receivership on September 28, 2026, on application by Vector Financial Services Limited and Olympia Trust Company, after defaulting on a $25 million acquisition loan secured against an undeveloped residential property located at 0 Mayfield Road in Brampton, Ontario. The lenders were owed approximately $26.3 million as of September 8, 2026, and raised concerns about an additional $8.1 million mortgage registered against the property without their knowledge or consent. The appointment follows the lenders' efforts to separate the property from broader litigation involving Rajvinder Singh Grewal, the developer's sole director and officer, and several related parties.

RSG Mayfield had planned to develop the property into a residential community comprising 52 single-family homes, 52 townhouse units and 260 condominium apartments, with approximately 468,000 square feet of gross floor area. The proposed 364-unit development never proceeded to construction, and the property remained undeveloped when the receivership application was heard.

The project was financed under an April 15, 2025 commitment letter pursuant to which Vector and Olympia agreed to advance $25 million to fund the property's acquisition. The lenders received a first-ranking mortgage registered on May 12, 2025, together with a general security agreement, assignment of rents and a personal guarantee from Grewal.

According to the lenders, RSG Mayfield stopped making monthly interest payments in April 2026. They issued a demand for repayment and a notice of intention to enforce security on April 24, 2026, before commencing proceedings against the company and Grewal on May 8. The indebtedness had increased to $26,269,753.66 by September 8, excluding continuing interest, legal fees and other enforcement costs.

The lenders also questioned changes to the property's subordinate financing arrangements after enforcement proceedings began. A $3.5 million second mortgage held by Avtar Singh Grewal, which had been subordinated to the lenders' security, was discharged on May 26, 2026. On the same date, a new $8.1 million mortgage was registered in favour of Jagtar Raman and Inderjit Dhugga. The lenders said they had not consented to the new charge and did not know what consideration had been exchanged or whether the two transactions were connected.

The property was also caught up in separate litigation commenced by WIGI Restructured Bond Corporation, involving Grewal, Avtar Singh Grewal, Davinder Khattra, RSG Law Professional Corporation and related persons and entities. That proceeding involves allegations of fraudulent conduct against certain defendants. Justice Myers granted a Mareva injunction in the WIGI proceeding on April 23, 2026, and subsequently appointed AlixPartners as sales officer over a portfolio of connected properties. Restrictions on dealings with the Mayfield property were registered in June.

The lenders sought a separate receivership to avoid having the property tied to the costs and delays of the broader proceeding. They argued that RSG Mayfield had no operating business, employees or revenue to preserve, and that a property-specific receivership would allow their security to be realized without unnecessary expense. AlixPartners, acting in the related proceeding, did not oppose the appointment.

In his September 28 endorsement, Justice Myers observed that the mortgage was in default and that the property required stewardship and sale. RSG Mayfield and Grewal did not oppose the receivership. The Court nevertheless identified unresolved questions surrounding the second mortgage and the proper distribution of any funds remaining after repayment of the first mortgage.

Justice Myers rejected the prospect of automatically distributing surplus proceeds to the second mortgagees and the property owner without further scrutiny. He determined that the competing claims and underlying transactions should be examined through the broader WIGI process, where similar accounting and entitlement issues involving numerous related properties were already being addressed.

The receivership order accordingly removes the Mayfield property from the sales officer's general property mandate while preserving AlixPartners' oversight of any residual proceeds. TDB must provide property information and updates to AlixPartners upon request, account for proceeds received and transfer any funds remaining after customary expenses and secured creditor payments that would otherwise be payable to the debtor. The order also preserves AlixPartners' role concerning any interest held by Avtar Singh Grewal in the property.

TDB Restructuring is the receiver. Counsel includes Robins Appleby for Vector and Olympia and Paliare Roland for AlixPartners in its capacity as sales officer in the related proceedings.