Three condos in downtown Toronto by developer Cresford Developments went into receivership on March 27, according to documents filed today by the receiver, PricewaterhouseCoopers Inc.
The three buildings are The Clover on Yonge (593 Yonge Street), Halo Residences (480 Yonge Street) and 33 Yorkville Residences.
More than 1,600 purchasers bought units at the three properties, according to court filings posted on PwC's website. "No decisions have been made in respect of these contracts," the receiver's notice states.
Investors bcIMC Construction Fund Corp. and Otera Capital Inc. asked the court for the receivership earlier this month and it was granted March 27, according to filings.
Court documents posted by PwC include allegations of separate ledgers kept by the developer where one set was shown to lenders and another set included additional costs. These allegations have not been proven in court.
The applicants for receivership cited defaults by Cresford on lending agreements, according to court documents. These include an overdue interest payment and liens on the properties, as well as projected cost overruns.
In court filings, the applicants claim the developer owes payments on a $164 million mortgage, according to the Toronto Star.
In the court documents, it is claimed that Cresford took in $212 million from unit purchasers in the three buildings, according to the Star, which adds that Otera and bcIMC claim in the documents that they are owed about $100 million in credit by Cresford, and Cresford’s senior secured creditors claimed they were owed a total of $421.4 million. All the figures are subject to revision, according to the receiver.
Cresford lawyer Steven Graff told the Star the company had tried to stabilize the business through court protection under the Companies’ Creditors Arrangement Act, but had not been successful, leading to the developments going into receivership.
This follows other legal issues for the developer.
On January 21, Maria Athanasoulis, Cresford's former president, filed a 33-page wrongful dismissal claim that alleged Cresford has a “crash crisis," as reported by Toronto Storeys last month.
The story cites a Globe and Mail article saying that, in her claim, Athanasoulis alleges Cresford needs close to $150-million to finish these projects. She is seeking close to $50-million in compensation, saying she is owed 20% from the uncompleted condominium projects.
According to The Globe and Mail, Cresford’s chairman, Daniel Casey, has since made a counterclaim, which alleges that Athanasoulis “exaggerated the size and urgency of Cresford’s payables and cost overruns,” and is seeking millions in damages for her alleged mismanagement.
None of those allegations have been tested in court.
As for the pre-construction purchasers of the three towers in receivership, the receiver's notice asks them to e-mail the receiver at halo.clover@pwc.com, with details of their contract.
Toronto Storeys reached out to Cresford this evening but did not receive comment by time of publication.
