Graziella Fine Jewellery placed in receivership after year-long RBC repayment demand

Graziella Fine Jewellery Inc. was placed into receivership on September 11, 2026, on application by Royal Bank of Canada, after failing to repay more than $527,000 owing under demand credit facilities for more than a year. Justice McCarthy of the Ontario Superior Court of Justice appointed Grant Thornton as receiver over the jewellery retailer's assets, finding that RBC had limited visibility into its collateral and that there was no evidence Graziella could repay the debt, obtain refinancing or secure a capital injection.

Graziella is an Ontario corporation operating as a jewellery store. It entered into a credit agreement with RBC on February 7, 2022, under which the bank provided four facilities, including a $350,000 revolving line of credit, two term loans originally advanced in amounts of approximately $74,296 and $128,222, and business credit card facilities with a maximum availability of $150,000. The term loans were subsequently repaid, leaving the line of credit and credit card facilities outstanding. The company's obligations were secured by a general security agreement giving RBC a first-ranking security interest over Graziella's personal property. Three related Ontario corporations guaranteed the indebtedness, while directors and brothers Jacques Basmaji and Deeb Basmaji each provided personal guarantees for part of the debt.

RBC's concerns with the business began in mid-2024 following multiple overdrafts and problems obtaining financial information. The bank requested financial documents in fall 2024, with a December 20 deadline, but did not receive the required disclosure until February 2025. On March 18, 2025, RBC sought further reporting, including quarterly profit and loss statements, balance sheets, aged receivables and payables, and updates on HST and source deductions. According to the record, those documents were never provided. Graziella's RBC account also went into overdraft repeatedly between February and September 2025, and the company stopped using its RBC accounts around September 2025.

RBC demanded repayment and delivered notices of intention to enforce security on August 29, 2025. The parties subsequently attempted to negotiate a forbearance agreement but did not reach an agreement. As of May 13, 2026, Graziella owed RBC $527,875.20, excluding further accrued interest, fees, disbursements and costs. Justice McCarthy found that the demand debt remained unpaid approximately a year after demand and that Graziella had produced no evidence of a pending capital injection or feasible refinancing. The Court also pointed to outstanding financial reporting, the company's move away from its RBC accounts and multiple overdrafts as defaults under the credit agreement.

Graziella opposed the receivership, including on the basis that discoveries had not occurred. Justice McCarthy rejected that position and concluded that appointing a receiver was just and convenient. He found that RBC's facilities were payable on demand, the debt had not been repaid and RBC lacked sufficient information about the financial condition of the business and the value of its collateral. He also noted that the general security agreement expressly contemplated the appointment of a receiver following default.

Grant Thornton is the receiver. Counsel includes Gowling WLG for RBC, Carnevale Business Corporation for the defendants, and Bennett Jones for Corona Jewellery Company.