Receiver Appointed Over Vandyk Group Company Owing Over $10M

This week brought the final nail in the coffin for a company owned by John Vandyk: Founder, President, and CEO of Vandyk Properties. Home Trust Company is alleging that Vandyk-Backyard Humberside Limited is in default of a $10M loan, and requested the company be placed under receivership earlier this week.

And the Ontario courts have obliged. A formal receivership order dated March 5, 2024, appoints msi Spergel Inc. as receiver over all “assets, undertakings, and properties” related to the Mississauga-based company, including a two-storey commercial property at 10 Neighbourhood Lane in South Etobicoke. Current tenants appear to include Stonegate Community Health Centre, Trilogy Physiotherapy West, and an IDA Pharmacy, amongst others.

Notably, a condo property at 25 Neighbourhood Lane — which also has Vandyk-Backyard Humberside’s name attached, alongside Vandyk-Backyard Queensview Limited — has been excluded from the order. That property has been subject to separate receivership proceedings, which came to a head last month when the courts appointed TDB Advisory Limited (formerly RSM Canada Limited) as receiver and manager over two unsold units within the building.

Receivership 'Just And Appropriate'

Although Tuesday’s receivership order extends to all assets of Vandyk-Backyard Humberside, it seems that Home Trust Company instigated the proceedings based on debts related to the commercial property at 10 Neighbourhood Lane specifically.

The March 4 factum of the lender describes a non-revolving bridge loan in the principal amount of $10M, which was issued to the debtor to refinance the first mortgage construction financing on the property on April 28, 2020. As security for the loan, the debtor granted a number of security documents in favour of the lender, including a general assignment of rents entitling the lender to collect any rent payments made in the event of default.

At that time, the debtor also agreed in writing that the lender would be entitled to pursue a receivership order in the event of default.

It would seem that Vandyk-Backyard Humberside has technically been in default of the loan for around six months now, after failing to make interest payments due to Home Trust Company from September 1, 2023, onward.

In the time that has elapsed since, Home Trust demanded a $10,145,007 payment (to no avail), and the debtor attempted to sell the property at 10 Neighbourhood Lane (to no success).

The factum also notes that three other mortgages are registered on title to the property, including $2M in favour of Kay Family Investments Inc. registered on July 11, 2019, $2M in favour of 2233651 Ontario Limited registered on October 11, 2019, and $1.15M in favour of Haleemah Muhammad registered on August 21, 2023.

In addition, it says there is a $9,473 construction lien registered by Live Patrol Inc. against the property on November 22, 2023.

With no less than a laundry list of debts and defaults under Vandyk-Backyard Humberside's proverbial belt, the factum concludes that a court-appointed receivership is “just and convenient and appropriate” at this point in time. STOREYS reached out to Vandyk-Backyard Humberside for comment on the proceedings, but did not hear back by the time of publication.

Is It Curtains For Vandyk?

Vandyk-Backyard Humberside is part of the once-illustrious Vandyk Group of Companies, and anything associated with the Vandyk name has been on the brink of collapse for some time.

This past November, KingSett Mortgage Corporation and Dorr Capital Corporation requested that a receivership order be granted for five Vandyk developments: UPtowns and Heart Lake in Brampton, The Ravine and Lakeview DXE Club in Mississauga, and Grand Central Mimico in Toronto. At that time, Kingsett and Dorr alleged that Vandyk owed more than $203M related to those five projects.

As of late January eight sites connected to the Vandyk Group had been declared insolvent, according to reporting from The Globe and Mail.

In what seems to be a more recent development, all websites associated with Vandyk have been suspended.

Previous reporting by STOREYS has revealed that Vandyk is also behind two buildings in the Sarasota area in Flordia, with a third, dubbed SIX88, listed as under construction on Vandyk's website at the time of investigation. STOREYS has also ascertained that Vandyk owns The Shack, a restaurant in Cortez, Florida, which the company reportedly bought in 2014 for $4M. The Shack was put up for sale in April of last year.