National Bank launches creditor-driven CCAA to stabilize Minglian and take control of half-built Spruce Project

National Bank of Canada has taken the rare step of initiating a creditor-driven CCAA proceeding against Minglian Holdings Ltd. and 0882892 B.C. Ltd., seeking urgent court supervision after the bank uncovered alleged improper fund transfers, mounting project delays, and a looming risk of severe weather damage at the group’s unfinished Spruce Project in Vancouver. Justice Stephens issued an Initial Order on September 25 that appointed MNP as monitor with enhanced powers that extend far beyond typical oversight, authorizing the firm to control development activities, manage expenditures, and take possession of the Spruce Project assets in order to prevent further deterioration and chart a viable path to completion. The court granted a ten day stay, approved an initial five hundred thousand dollars in DIP financing from National Bank, and created priority charges to fund winterization, construction oversight, and the monitor’s work.

The Minglian Group operates several real estate projects through a network of single purpose entities that channel beneficial ownership back to Minglian Holdings. The Spruce Project consists of a ten-storey mixed use tower at 2511 Spruce Street, with 38 residential units and commercial space, most of which has been pre-sold. Construction began in August 2022 and has fallen far behind schedule due to cost overruns, depleted equity, and deteriorating relationships with trades. Only nine levels of concrete have been poured, and MNP has warned that the exposed structure requires immediate protective work before winter in order to preserve value.

Financial strain accelerated through 2024 and 2025 as the developer missed interest payments, failed to meet equity contribution commitments, breached insurance covenants, and drew loan proceeds for purposes that National Bank says were outside the financing agreement. The construction loan matured on April 1, 2025, and NBC allowed limited bridge draws in May and July while assessing whether the group could stabilize. Meanwhile, liens from subcontractors continued to accumulate and the group ran out of liquidity entirely.

National Bank’s confidence in management collapsed after a September 2025 incident involving the Pridham Project. Minglian allegedly sold that property without lender consent and deposited $366,828.50 into an NBC account, then quickly transferred most of the proceeds out before the bank could apply them to indebtedness. $250,000 went to a related entity, Pacific Community Builders Inc., and another $40,000 was directed to the principal of the group before NBC stopped the cheque. These actions convinced the bank that continued financing without court oversight was untenable.

Under the Initial Order, MNP has authority to take possession of the Spruce Project, direct all construction activity, manage site security, collect and administer project funds, engage or terminate contractors, and prepare for either project completion or an as is where is sale. The DIP financing can be used only for the Spruce Project and professional costs. Other Minglian projects are excluded from the Monitor’s enhanced control, although foreclosure and enforcement actions on those properties may continue under the carve outs in the stay.

The restructuring will focus first on winterizing the structure, validating cost to complete, assessing pre-sale obligations, and determining whether continued construction or a sale maximizes recoveries. MNP is the monitor, represented by Fasken. National Bank is represented by McCarthy Tetrault. The debtors are represented by DLA Piper.