On December 16, 2025, the Ontario Superior Court of Justice (Commercial List) granted an order appointing KPMG Inc. as receiver over all assets, undertakings, and properties of 2668979 Ontario Inc., including the real property municipally known as 355 North Street, Newcastle, Ontario. The application was brought by Royal Bank of Canada under section 243 of the Bankruptcy and Insolvency Act and section 101 of the Courts of Justice Act. Justice Dietrich granted the order following a contested hearing in which the debtor opposed the appointment and sought to retain control of sales and completion efforts.
2668979 Ontario Inc. is part of a property development group operating under the trade name Eaglebay Estates. The company is the registered owner of a proposed 29-unit residential townhouse development in Newcastle, Ontario. As of the hearing, 25 units had been constructed and four units were substantially complete, with external work such as landscaping and site finishing remaining outstanding. The project experienced delays in obtaining municipal approvals required for registration, which was ultimately completed in April 2025.
The project’s sales trajectory was materially affected by the approval delays, which led to several purchasers rescinding their agreements of purchase and sale. Under a credit agreement dated September 7, 2022, Royal Bank of Canada provided two credit facilities secured by a general security agreement and a charge over the property in the principal amount of $18.6 million. The credit agreement was most recently amended to extend maturity to August 31, 2025.
By letter dated August 22, 2024, the bank issued a default notice citing, among other matters, failures to maintain minimum purchaser deposits, pre-sales thresholds, and funding of cost overruns. While certain defaults were disputed, the debtor did not dispute that the facilities matured on August 31, 2025. A formal demand for repayment and notices under section 244 of the BIA followed on September 24, 2025. As of November 21, 2025, the debtor was indebted to the bank for approximately $9 million, subject to reductions from subsequent unit closings.
The debtor argued that a receiver was unnecessary, maintaining that continued unit sales would allow the bank to be repaid in full and preserve residual equity estimated at approximately $2 million. Evidence showed that only nine of the 29 units had closed as of late November 2025, with sales materially lagging projections previously provided to the bank. The debtor also acknowledged that more than $1.8 million was required to complete the project, including outstanding trade liabilities of $734,388.56, with over $625,000 outstanding for more than 90 days.
Although the debtor referenced additional financing obtained through a related entity, the court found no evidence that sufficient funds were available to complete construction and address unsecured liabilities, nor that refinancing of the bank was imminent. The bank cited loss of confidence in management’s sales forecasts and realization efforts.
Justice Dietrich held that it was just and convenient to appoint a receiver, finding that the debtor had not demonstrated the financial capacity to complete the project without further risk to the bank.
Counsel is Chaitons LLP for Royal Bank of Canada and Bennett Jones LLP for the debtor, 2668979 Ontario Inc.
