King Square Ltd. and Markland Residential Corporation, Receivership

King Square Ltd., the registered owner of real property known municipally as 9390 Woodbine Avenue, Markham, Ontario (the “Condo Lands”), and Markland Residential Corporation (“Markland”), the registered owner of the vacant lands adjacent to the Condo Lands, were placed into receivership on November 30, on application by MarshallZehr Group. In 2014, Firm Capital provided a $50 million loan to the companies (“Loan Facility A”). In 2017, MarshallZehr Group and Firm Capital agreed to act as co-lenders under the loan, and MarshallZehr Group provided $32.2 million in funding to the companies (“Loan Facility B”). The loan was provided for a three-phase development project. Phase I - the retail mall development - has been completed and is being operated as King Square Shopping Mall, but is under capacity. In 2022, Markland agreed to sell the Phase II lands - which were to be used for an 11-storey hotel development - to Stateview Homes. However, the APS with Stateview Homes was conditional on the Phase II and III lands being severed, which never occurred. The loan matured in 2020 without repayment. Firm Capital has recovered the entirety of the amounts owing to it under Loan Facility A by selling units of the King Square Shopping Mall under power of sale, but MarshallZehr Group is still owed approximately $52 million under Facility B on account of principal, interest and fees. EY is the receiver. Counsel is Chaitons for MarshallZehr Group, Fogler Rubinoff for Firm Capital and Schneider Ruggiero Spencer Milburn / Lenczner Slaght for Stateview Homes.

By: Dina Milivojevic