- Insolvency Insider Canada
- Posts
- Toronto Artscape Inc., Receivership
Toronto Artscape Inc., Receivership
Toronto Artscape Inc. (“Artscape”), a Toronto, Ontario-based not-for-profit corporation which manages affordable residential properties, live/work spaces, event venues, and community cultural hubs for the arts community, was placed into receivership on January 11, on application by TD Bank, owed approximately $21 million.
Artscape is an important provider of affordable spaces for artists and community organizations in the City of Toronto. It currently operates 14 projects across Toronto, the majority of which are subject to long-term leases, licenses and operating agreements with the City, and has under its management 265 affordable rental and ownership spaces for artists and their families, 115 commercial rental and ownership spots and more than 500 event venue rentals a year.
Despite proactive steps taken by Artscape to restructure, the burden of its long-term debt totalling $32.5 million arising from its expansion efforts and the economic impact of COVID-19 have left it without sufficient working capital to cover its operating costs and debt service payments. Beginning in August 2023, Artscape defaulted on various loans, including its loan from TD Bank. It entered into forbearance agreements with its lenders to ensure continuity of services and to allow Artscape and the City sufficient time to develop a continuity plan for the transition of the company’s not-for-profit services and operations.
It was ultimately determined that a successor would be necessary to assume responsibility for Artscape’s affordable housing residential operations, and Artscape Non-Profit Homes Inc., another non-profit company, was selected as the successor. With respect to Artscape’s residual non-profit “community hub” operations, no singular successor could be identified and a new non-profit entity – ArtHubs Toronto Inc. - was established. It will employ key former Artscape staff under new governance leadership.
On the same day that the receiver was appointed, the Court granted approval and vesting orders giving effect to the continuity plan. msi Spergel Inc. is the receiver.
Counsel is Harrison Pensa for TD Bank; Miller Thomson for Artscape; Fogler Rubinoff for the receiver; Simpson Wigle for First Ontario Credit Union; Lawson Lundell and Chaitons for Vancity Community Investment Bank; Iler Campbell for Artscape Non Profit Homes Inc. and ANPHI Affordable Homes Inc.; Robins Appleby for Community Forward Fund; and Osler for MPCT DIF DAM Residence at Weston Inc.
By: Dina Milivojevic