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Receiver appointed over hotel franchisee's assets after significant loan defaults and lack of viable refinancing plan.
The applicant credit union sought an order appointing a receiver and manager over the property and assets of the respondent hotel franchisee and its owner due to significant loan defaults.
The respondents opposed the application, arguing they had a plan to sell the property and refinance to pay off their creditors.
The court found the respondents' proposed sale agreement was not firm and lacked evidence of financial viability.
Concluding that the applicant's security was at risk and a receiver was necessary to stabilize the business, the court granted the application and appointed the receiver, though it declined to authorize an immediate assignment into bankruptcy.
Court approves receiver appointment and pre-packaged asset sale after fair marketing process.
A secured lender applied for the appointment of a receiver over two debtor corporations for the limited purpose of completing a sale of substantially all business assets through a pre-packaged transaction.
The debtors did not oppose the application and consented to early enforcement of the lender’s security.
Evidence showed the debt exceeded $2.9 million and that absent a sale the businesses would cease operations and liquidate.
The court found the marketing process fair and comprehensive and that the proposed purchase price exceeded liquidation valuations.
Applying the principles from Royal Bank of Canada v. Soundair, the court approved the receiver’s appointment, authorized the sale agreement, granted a vesting order, and sealed commercially sensitive valuation evidence.
