Horsing around at 1 Bloor
Overview
New article: “How the plan to build Canada's tallest Condo Fell apart" (Globe and Mail, Sept. 25, 2009) The Wild West was alive and kicking at the corner of Yonge and Bloor with the legal drama that culminated in the recent sale by One Bloor St. East Limited, an affiliate of Bazis International Inc., of its 1 Bloor East property to an affiliate of Great Gulf Homes.As legal counsel to Bazis, Leor Margulies and I had to saddle up to protect our client from getting the property sold out from underneath it at a rock bottom price.
Earlier this summer, a group of Toronto developers and financiers acquired the mortgage on the property from a major bank, which was divesting itself of all its Canadian loans due to the credit crisis. In a daring and unconventional move, the group immediately started court proceedings to have a receiver appointed and submitted a low “stalking horse bid” for the purchase of the property.
A “stalking horse” is a concept that originated in the context of hunting.During a mounted hunt for wild game, hunters often dismounted and approached their unsuspecting prey using the horse as a decoy.In a business context, a “stalking horse bid” is an initial bid that sets the parameters and terms of a bidding war for the purchase of assets from a defaulting creditor.The person making such a bid usually is in a preferential position because, due to protective terms of the stalking horse bid, other offers need to be substantially higher than the stalking horse bid in order to succeed.A stalking horse bid is almost unheard of in the context of real estate.In this case, the “prey” was one of the most coveted pieces of real estate in Canada.
Leor and I used our ingenuity, legal prowess, and industry connections to block the receivership proceedings, uncover other financing and/or joint venture options for Bazis, and ultimately negotiate the sale of the property at a fair price to an affiliate of Great Gulf Homes.
As a result, the BRIDGE team had another success.
The substantial Toronto presence of Bazis International Inc. continues with its Emerald Park and Crystal Blu projects, which are both proceeding on schedule and without issue.
Now if only Leor and I could agree on, between the both of us, who was the Lone Ranger and who was Tonto...
For more information on the 1 Bloor East saga, please see the news article links below: How the plan to build Canada's tallest Condo Fell apart (Globe and Mail, Sept. 25, 2009) Purchasers of units in once-famed 1 Bloor East to get deposit refunds (National Post, September 12, 2009) “’Mixed-use’ condo to replace 1 Bloor project: Toronto’s real estate world buzzed with word of the sale” (Globe and Mail, August 21, 2009) “Condo buyers may have to line up again: ‘No contractual obligation’ to original purchasers, property’s new owner says” (Toronto Star, August 21, 2009) “1 Bloor condo dreams alive: Great Gulf Homes said to be the buyer; high-rise condo expected on site, but minus the hotel” (Toronto Star, August 20, 2009) “One Bloor sold” (Toronto Star, August 18, 2009) “Deal gives Bloor high-rise loan extension: Bazis in default” (National Post, July 21, 2009) “Owner behind 1 Bloor finds partner to help buy out $46 million defaulted loan” (National Post, July 22, 2009) “Bazis fends off receivership, for now, for 1 Bloor tower” (National Post, July 20, 2009) “If I lose 1 Bloor, I don’t just lose a deal – I lose my dream” (Toronto Star, July 19, 2009) “Yonge-Bloor Development on the brink: court papers allege Kazakh backers mired in ‘massive financial scandal’ (July 18, 2009) “Court action a ruse to steal One Bloor, says developer” (Toronto Star, June 20, 2009) “Demolition begins to make way for 1 Bloor condo” (CTV, May 29, 2008) “Condo minimums: why some who waited over a week for a prestigious new address feel left out in the cold” (CityNews, November 13, 2007) “Condomania hits as 1 Bloor St. goes on sale” (CTV, November 13, 2007) “Bloor St. Condo draws a crowd as units about to go on sale” (CityTV News, November 6, 2007) “Kazakh company erecting ‘bold’ tower at Yonge-Bloor: Borat invited to 80-storey building’s design unveiling, official jokes” (CBC News, April 5, 2007)