When it became public in February that Coromandel Properties had filed for creditor protection under the Companies' Creditors Arrangement Act (CCAA), the news sent shockwaves across the real estate world here in Vancouver.
When Coromandel Properties exited creditor protection about a month later, the news was perhaps even more surprising, particularly to those familiar with the industry and insolvencies. Such a short amount of time is uncommon in CCAA proceedings, even more so for companies with $700M of debt, and the decision surprised even those within Coromandel Properties.
A source familiar with the company's operations who asked to remain anonymous says the decision to exit creditor protection was made by CEO Jerry Zhong — referred to as Zhen Yu Zhong in court documents — against what was recommended by advisors.
Publicly, the move gave the impression that the company's financial difficulties were resolved, but that was not the case. Instead, Coromandel Properties' various creditors were lining up to get what they were owed, initiating individual foreclosure proceedings that would now unfold privately rather than in full view of the public — as would have been the case with CCAA proceedings.
One of the first foreclosure proceedings — of many that remain ongoing — was for a six-parcel land assembly on Alberta Street near the Oakridge Centre redevelopment in Vancouver. As STOREYS first reported in May, Coromandel Properties had until June 30 to pay $5.2M to stop the foreclosure of three of the six parcels. Coromandel was unable to do so, and also failed to pay the $5.3M required to stop the foreclosure of the other three parcels. All six parcels were subsequently listed for sale in early July.
Prior to the Alberta Street foreclosures, Peterson Group bought Coromandel out of several projects the two planned on co-developing, with more parties distancing themselves from Coromandel shortly thereafter.
In May, Director of Development Rob Elliott quietly departed the company. An internal memo announcing his departure seen by STOREYS says that Elliott left the company of his own accord.
Subsequently, in June, Senior Vice President of Development Mark Kopinya also departed the company. The internal announcement regarding Kopinya was ambiguous about the nature of his departure.
Both Elliot and Kopinya formerly worked at Bosa Properties at the same time and are now both at Anthem Properties.
Around that time, Coromandel also received a $280M offer to purchase 30 properties, split across six planned projects, according to a drafted purchase and sale agreement seen by STOREYS. Coromandel and the buyer entered into the agreement on June 5, but the deal ultimately broke down in July after the buyer failed to pay the $5M deposit, despite being granted multiple extensions, according to other transaction documents.
Further trouble came in August.
According to internal communications from September that have been shared with STOREYS, the company had failed to pay employee salaries as of August 1.
Under British Columbia's Employment Standards Act, employers must pay employee wages within eight days after the end of the pay period.
Employees at Coromandel Properties received little to no communication about the payroll trouble, the internal communications indicate, and multiple employees had filed, or were considering filing, formal complaints with the Employment Standards Branch, which enforces the Employment Standards Act.
The payroll trouble was confirmed to STOREYS by two other former employees of Coromandel, who were both at the company as of September but have since departed. One employee confirmed that they still had not been paid as of late October and had not received any communication from the company. The other, who held a leadership position at the company, said many staff members eventually stopped working in September and subsequently left.
The most notable exit came that month, with Chief Operating Officer Raymond Louie quietly departing, which was confirmed by an aforementioned source and is now indicated on Louie's LinkedIn profile. It's unclear if Louie's exit was related to the company's failure to make payroll.
STOREYS reached out to Coromandel Properties multiple times seeking comment or denial, but has not received a response. Attempts to reach Raymond Louie were also unsuccessful.
After serving on Vancouver City Council for five terms, Raymond Louie joined Coromandel Properties as its COO in January 2019.
The hiring of a former city councillor to lead the company put a relatively large spotlight on Coromandel Properties, which subsequently built up a large portfolio of properties in a relatively short period of time.
The spotlight also worked against Louie and Coromandel, however. Shortly after he joined the company, it was reported that Louie had facilitated numerous private meetings in February and March of 2019 between local developers and then-Mayor Kennedy Stewart. Stewart said he did not know the nature of Louie's relationship with those developers, but one of those developers was Coromandel CEO Jerry Zhong.
According to Coromandel's CCAA filing in February, the company employed approximately 30 people. Since the filing, the company has laid off several junior-level staff members or seen them leave on their own, a source familiar with the company's operations told STOREYS.
Along with the senior staff members who have left, and those who have now left as a result of not receiving their paychecks, the company's ranks have dwindled significantly, as the various properties it once owned also continue to dwindle.
In late August, one property Coromandel was previously eyeing for development in East Vancouver, Southview Gardens, sold for $68M as part of receivership proceedings. Numerous other properties held by Coromandel are currently going through similar processes of being sold off in order to recoup the amounts owed to creditors.
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