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Real Estate Workout + Enforcement Team Work



One Bloor Street East, Toronto
After assisting the original developer to acquire this much sought after site at the crossroads of two subway lines in Toronto in December 2006, the firm's condominium group helped to launch an exceptionally successful sales campaign.The 2008-2009 financial crisis put the site in jeopardy with the French bank (having its own financial difficulties) selling its loan to a group of 2 lenders and a high-rise developer who attempted to acquire the site at a bargain price through an innovative use of receivership proceedings.Our firm then assisted the developer in the complex receivership proceedings to negotiate the sale of the property to Great Gulf Homes.Ultimately, we represented Great Gulf in the remarketing and closing of the completely redesigned One Bloor Street East Project, including the sale of over 80,000 sq. ft. of highly desirable retail space to First Capital Corporation.

Land Refinancing – 2008/2009 During the January 2008-2009 financial crisis, we were successful in negotiating extension and standstill arrangements on a number of major land loans that were stalled due to lack of construction financing.In those cases, the senior lenders were Schedule 1 banks with whom we had good working relationships and were prepared to be patient.In one of those loans, we were also successful in arranging for financial and development partners for our client which resulted in a 2-tower project being completed and purchasers getting their units at reasonable prices.

327 Royal York Road, Toronto We represented DUCA Financial Services Credit Union Ltd. in respect of a first mortgage construction loan, as well as Centurion Mortgage Capital Corporation in respect of mezzanine financing for a mid-risecondominium project located adjacent to the Mimico GO Station.Construction had already commenced when the developer encountered severe financial difficulties.We represented Centurion on the buyout of the first mortgage loan and the commencement of the receivership proceedings.At the end of the day, the site garnered a substantial price well in excess of what was expected and was purchased by the VANDYK Group of Companies.Subsequent to the sale, it was revealed that VANDYK made a deal with GO Transit/Metrolinx to combine the site with the station and do a larger redevelopment. Interestingly, our firm had represented the original developer of the site prior to 2008 and had a deal in principle in place withGo Transit to do the same thing that VANDYK is now doing.

Clarington Land Receivership Robins Appleby LLP over the years has handled a number of complex real estate workouts and enforcements for a major Schedule 1 bank.One of the more interesting and successful workouts involved a club deal between our client and other Schedule 1 banks, who had provided financing to a major developer for servicing of over 1,500 lots in Clarington. Substantial cost overruns relating to the need for a sewage treatment plant were identified after the project went into default which could have resulted in material losses.A private receiver was engaged and through the use of a "stalking horse bid", the property was ultimately sold to the original builders who had significant deposits in the project at a price, which together with other collateral security, allowed the lenders to fully recover all of their principal, interest and costs.

In the recent Urbancorp enforcement proceedings, we represented a subordinate lender which had provided financing on a number of Urbancorp projects.Our client was successful in recovering its loans in a myriad of receivership and bankruptcy actions.

Successful Markham Loan Default Defence

We successfully defended the developer of an office/industrial complex in Markham where the lender called the loan mid-way through construction, completed the project and sued the developer for approximately $20 million claiming for both breach of the loan agreement and fraud. Had we failed, the developer would have been ruined for life as a judgment in fraud cannot be discharged by a bankruptcy. However, we defeated both the fraud claim and the breach of loan claim. The developer walked away with a multi-million dollar judgment for his lost project and a punitive costs award imposed upon the lender for alleging and then failing to prove fraud.

Winning After Losing in Court

A client approached us for help after the court had just ruled in his former partner's favour that their jointly owned investment properties had to be sold at auction. We prevented the sale of all but one of the properties. Four years later, we reached an agreement which permitted our client to buy out his partner for fair market value.

Managing Complex Receiverships

We represented a major bank which took over two large projects with overlapping ownership in Southern Ontario. One project was a large residential subdivision with hundreds of lots and the other project was a luxury highrise residential condominium. The common problem on both projects was feuding owners. We obtained a court-appointed receivership and successfully navigated multiple litigation processes on both projects involving multiple competing priority claims, liens and shortfalls requiring claims against guarantors. At the end of the multi-year process, the bank recovered both its loan and its legal costs as the court agreed that the legal fees incurred were reasonable.

 

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Robins Appleby LLP Suite 2600, 120 Adelaide Street West, Toronto, Ontario M5H 1T1
E. info@robapp.com T. 416.868.1080 F. 416.868.0306

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