Empirical wins receivership order over 7115 Yonge after prolonged defaults and failed forbearance

Empirical Capital Corp. secured a receivership appointment over TerraBona 7115 Yonge Ltd. on December 1, 2025, after Justice Dietrich accepted that the long-running default under a $31 million development loan had not been cured and that the lender remained unpaid more than a year after delivering its formal demand. The application had originally been scheduled for February 10, 2025, before the parties pivoted to an Accommodation Agreement that deferred enforcement until June 15, 2025, but that arrangement ultimately collapsed when TerraBona failed to satisfy its conditions.

TerraBona’s sole meaningful asset is a 0.95 acre parcel at 7115 Yonge Street and 8 to 14 Grandview Avenue in Markham, consisting of vacant land and four detached dwellings slated for redevelopment into a high density mixed use tower. The borrower sought additional time through early 2025 to pursue zoning approvals at the Ontario Land Tribunal and to negotiate temporary easements with Metrolinx related to municipal works.

The loan relationship deteriorated in mid-2024 after TerraBona missed monthly interest payments beginning in May 2024. The lender delivered a demand and BIA notice on September 5, 2024, and the indebtedness exceeded $33 million by November 15, 2024. By late 2025, the balance had grown to roughly $36 million. TerraBona admitted the debt in the January 2025 Accommodation Agreement, confirmed there were no setoffs or counterclaims, and released all prior allegations including claims previously raised in discontinued litigation.

The Accommodation Agreement required multiple payments and milestones, including delivery of $1.196 million from a Metrolinx easement, completion of two further easement negotiations, satisfaction of property tax arrears, funding of an interest reserve, and success at the OLT hearing scheduled to begin after May 21, 2025. None of the required payments were delivered, and no amounts were applied to the outstanding interest or arrears. By July 2025, the lender confirmed that no forbearance conditions had been met and that both the Loan Agreement and Accommodation Agreement were in default.

With the defaults persisting, Empirical sought to schedule the receivership hearing after the anticipated September 3, 2025 OLT decision date, and TerraBona provided an unconditional consent to the appointment of MSI Spergel as receiver on September 17, 2025 if repayment did not occur. That consent crystallized when the indebtedness remained outstanding on the return date.

Justice Dietrich held that the test under section 243 of the Bankruptcy and Insolvency Act and section 101 of the Courts of Justice Act was satisfied, noting the lengthy and unremedied default period, the borrower’s inability to refinance or monetize its development rights, and the importance of a transparent sale process for the land. The Court emphasized that the lender had not acted precipitously given the 18-month interval since the initial default.

The order appoints msi Spergel Inc. as receiver and permits it to market and sell the property, continue or cease business activities, engage advisors, and borrow up to $750,000 to fund the receivership.

Garfinkle Biderman LLP represents Empirical, while Blaney McMurtry LLP represents TerraBona.