The Ontario courts have appointed a receiver over two unsold units within a boutique condominium building in South Etobicoke. And the proceedings have a familiar name attached. According to court documents, the debtors are part of the once-illustrious Vandyk Group of Companies.

Receivership proceedings against Vandyk-Backyard Queensview Limited and Vandyk-Backyard Humberside Limited were instigated by Peoples Trust Company and Firm Capital Mortgage Fund Inc. at the end of last month. Peoples and Firm allege that the borrowers have racked up over $12M in debt.

As a result, a formal appointment order went into effect on February 6, 2024, directing TDB Advisory Limited (formerly RSM Canada Limited) to act as the receiver and manager of 211-25 Neighbourhood Lane and 302-25 Neighbourhood Lane. The receivership order extends to the parking spaces and storage locker associated with those two units.

Construction on the 134-unit building at 25 Neighbourhood Lane wrapped up last year, and the building is part of a larger condominium complex known as the Backyard Neighbourhood Condos. In addition to 25 Neighbourhood Lane, the complex includes two other residential buildings. There are 505 units between all three buildings.

"Multiple Events Of Default"

A notice of application that went to the Ontario Superior Court of Justice at the end of last month explains that the lenders advanced a “condominium inventory term loan” in the amount of $12.7M for the 25 Neighbourhood Lane development on August 24, 2023. The loan was registered against the title of any unsold units.

In the time that has elapsed since, however, over $8M in various construction liens were registered against the unsold units. The registration of those liens put the borrowers in immediate default of the loan, as the liens would prevent the borrowers from being able to sell off available units “on a free and clear basis,” according to the January 30 application.

The lender attempted to notify the debtor that registering these liens constituted “multiple events of default” this past October. At that time, the lender also demanded repayment of the loan, which did not occur within the 10-day statutory period for repayment.

“Given the Vandyk Group’s financial position, the sale of the unsold units is the sole opportunity for recovery for the lenders and other stakeholders,” the application later states. “The appointment of a receiver is required in order to preserve, protect, and facilitate the sale of the unsold units for the benefit of the borrower’s stakeholders.”

January’s receivership application also touches on Vandyk’s recent “financial troubles,” noting that the Ontario courts have granted “several” other receivership orders involving members of the Vandyk Group of Companies. As of last month, eight sites connected to the Vandyk Group of Companies have been declared insolvent, according to reporting from The Globe and Mail.