Finstar Group stays in receivership, portfolio for sale

Groupe Finstar Inc. and related entities, a Quebec real estate developer, were placed into receivership on April 16, 2026, on application by secured creditor Carl Dumont, owed approximately $30 million, with the Court finding that Finstar was insolvent, had repeatedly missed repayment commitments and faced mounting enforcement action across its property portfolio.

Finstar has operated since 2018 as a developer, owner and manager of real estate projects, principally in Sainte-Agathe-des-Monts and Terrebonne. Simon Drouin is its founder and ultimate shareholder. The group’s portfolio includes 20 stabilized projects and 22 development projects. The stabilized portfolio included 16 residential properties containing 201 units and generating approximately $4 million in annual rent. The development properties had potential for more than 2,000 housing units, although most remained at an early stage.

Finstar historically relied on institutional financing. Beginning in 2021, higher interest rates, a slowing property market, cost overruns and construction delays pushed it toward more expensive private debt.

In February and April 2025, Dumont advanced an initial loan of approximately $3.4 million and a second loan of approximately $3.4 million. Dumont’s exposure had reached at least $25 million by June 2025. A September 2025 framework agreement addressed repayment of approximately $28 million, but Finstar failed to meet its commitments. He is now owed approximately $30 million, and holds mortgage interests affecting 38 of Finstar’s 40 real estate projects through direct property security, pledged shares or both.

By early 2026, Revenu Québec had registered a legal mortgage, secured creditors had issued mortgage enforcement notices and lenders had withdrawn Finstar’s authority to collect rents. Equitable Bank, which appears to be owed approximately $18.4 million, and Desjardins, owed approximately $7.6 million across a number of projects, delivered notices in February and March respectively. Secured debt totals over $107 million, while unsecured claims are currently being determined.

Finstar admitted that it was insolvent on a liquidity basis but argued that the value of its properties was not in immediate danger and that it should retain control of a sale process begun in December 2025.

Justice Luc Morin disagreed, finding that a receivership was needed to preserve the portfolio, coordinate competing creditors and prevent piecemeal enforcement from reducing recoveries.

More recently, Justice Morin rejected an attempt by Dumont to continue the case under the Companies’ Creditors Arrangement Act and approved a receiver-led sale and investment solicitation process for the portfolio. We covered that decision in our recent Document Library subscribers only email.

Raymond Chabot is the receiver. Counsel includes LCM Avocats for Carl Dumont, Hershman Law for the Finstar Group, and Dentons for Raymond Chabot as receiver.