Waterloo Innovation Network 3 Inc. (formerly known as Waterloo Innovation Network Inc.) and Waterloo Innovation Network 2 Inc., Receivership

Waterloo Innovation Network 3 Inc. (formerly known as Waterloo Innovation Network Inc.) and Waterloo Innovation Network 2 Inc., companies founded by former Dragons Den star Michael Wekerle, were placed into receivership on February 14 on application by Waygar Capital Inc., as agent for Ninepoint Canadian Senior Debt Master Fund LP, owed $87.6 million.

In 2014, Mr. Wekerle acquired a group of buildings in Waterloo, Ontario that once housed BlackBerry with the aim of creating a tech incubator to attract tech firms to the area. Mr. Wekerle also owns the El Mocambo music venue in Toronto.

The companies’ issues appear to be related to the sale of all but one of the Waterloo Innovation Network buildings, a situation which became the subject of litigation between Mr. Wekerle and his former business partner Mark Arbour, whom he hired to manage the properties. Mr. Wekerle says Mr. Arbour defrauded him of $15 million and caused him to sell the buildings when he otherwise would not have. Mr. Arbour accuses Mr. Wekerle of mismanagement, and says the buildings were sold with Mr. Wekerle’s approval due to office vacancies during the pandemic and to pay down some of the Waygar debt, which was taken out to renovate the El Mocambo only to have the venue stay closed for a significant period during the pandemic.

The receivership order only appears to cover the remaining Waterloo property and not the El Mocambo venue.

Fuller Landau is the receiver.

Counsel is Aird & Berlis for Waygar, Cassels for the companies, and Berkow Youd Lev-Farrell Das for Camacho.