Alexander Bissonette

The applicant lender sought appointment of a court-appointed receiver over three parcels of vacant land owned by the guarantor to conduct a sale in satisfaction of a $10 million guarantee.

The respondent guarantor and first mortgagee resisted the receivership.

The court upheld the validity of the applicant's second mortgages despite the absence of the first mortgagee's consent, finding the consent requirement was not a true condition precedent and the authorization and direction was unconditional.

However, the court declined to appoint a receiver, finding it unnecessary given the limited nature of the assets and the absence of any business to operate or preserve.

The guarantor was permitted 90 days to effect a private sale, with the applicant retaining the right to return for further relief.

The applicants, a group of real estate development entities (Ashcroft Homes Group), sought to extend an initial Companies' Creditors Arrangement Act (CCAA) stay of proceedings to facilitate a restructuring.

Secured creditors, representing 84% of the total secured debt, opposed the extension and instead moved for the appointment of interim receivers.

The court found the applicants' restructuring plan lacked substance, noted a significant loss of confidence in management due to past conduct and outdated property valuations, and determined that the collaborative receivership approach proposed by the majority of secured creditors was more appropriate.

The motion to extend the CCAA stay was dismissed, and the motions for the appointment of receivers were granted.