Court File and Parties

COURT FILE NO.: CV-21-00661144-00CL DATE: 20240209 ONTARIO - SUPERIOR COURT OF JUSTICE – COMMERCIAL LIST

IN THE MATTER OF SECTION 207 OF THE BUSINESS CORPORATIONS ACT, R.S.O. 1990, C. B.16, AS AMENDED

AND IN THE MATTER OF A WINDING UP OF MORRISON LAURIER MORTGAGE CORPORATION

BEFORE: Osborne J.

COUNSEL: Kyla Mahar and Patrick Corney, for HPI Advisory Inc., in its capacity as court-appointed Marketing and Mortgage Agent of the Applicant Jeffrey Kaufman, for 2418902 Ontario Inc.

HEARD: February 9, 2024

Endorsement

[1] HPI Advisory Inc. (“HPI”), in its capacity as the Court-appointed Liquidator and Marketing and Mortgage Agent (“MMA”) of Morrison Laurier Mortgage Corporation (the “Company”), moves for an order:

a. in the nature of an approval and vesting order, approving an agreement of purchase and sale between Lakeview Corporate Centre Inc. by HPI in its capacity as the MMA of the Company, and Assisi Offering Corporation in trust, executed January 9, 2024 (the “APS”) for the sale of the Lakeview Centre and the contemplated Transaction;

b. vesting in the Purchaser the right title and interest of the Vendor in and to the assets described in the APS; and

c. in the nature of an ancillary order sealing the confidential appendix to the Fourth Report, and approving the Fourth Report and the activities of the MMA as described therein.

[2] Defined terms in this Endorsement have the meaning given to them in the motion materials and in particular the Fourth Report of the MMA dated February 5, 2024.

[3] The relief sought today is unopposed.

[4] The Company is a mortgage investment corporation that invested in mortgages granted as security for short-term construction loans and land development loans primarily to builders and developers of residential real estate.

[5] Its largest investment was a Loan to fund the completion of an eight story mixed-use building (the “Lakeview Centre”) consisting of approximately 95,000 ft.² of retail space and 107,000 ft.² of retail and office space in Barrie, Ontario. The Loan is secured by a first mortgage registered on title. The Loan was impaired and the Company commenced this Application for a winding up order on April 26, 2021.

[6] That winding up order was granted by Justice Pattillo on July 8, 2021. It mandated the MMA to wind up the Company.

[7] The MMA has conducted a claims process and obtained an order on February 7, 2023 approving a sales process for the Lakeview Centre. That sales process was conducted over the spring and summer of 2023, and it resulted in the selection of a Successful Bid and in the motion for an approval and vesting order which was granted by Justice Penny on October 24, 2023. The Transaction was required to close by November 15, 2023. However, it did not close, with the result that the sales process was extended and ultimately, six bids for the Lakeview Centre were received.

[8] A new Successful Bid was selected, and the APS was signed on January 9, 2024. The MMA submits that the Transaction represents the highest and best outcome from the sales process and maximizes value for the Preferred Shareholders, with the result that it seeks the approval and vesting order today.

[9] The particulars of the Transaction are fully set out in the motion materials and in particular, in the Fourth Report.

[10] The business decisions of Court-appointed liquidators are afforded the same deference as are the business decisions of Court-appointed receivers. The Court should place confidence in the Liquidator’s decision and assume that it has acted properly unless the contrary is shown. It is appropriate that the Court relies upon the expertise of the Liquidator in carrying out its mandate: Christian Brothers of Ireland in Canada, Re, [2003] OJ No. 4249 at para. 25.

[11] I am satisfied that the Soundair Principles have been satisfied here. The MMA has made sufficient efforts to obtain the best price and has not acted improvidently; the efficacy and integrity of the sales process is clear on the record; the interests of all parties have been considered; and there has been no unfairness in the working out of the process.

[12] This conclusion is also consistent with the reasons for decision of Justice Penny made in this proceeding October 31, 2023. The extended sales process run thereafter was fair, transparent and reasonable.

[13] The proposed approval and vesting order is consistent with the terms of the Model Order of the Commercial List. While not determinative, that gives me additional comfort about the appropriateness of the terms of the order sought.

[14] The approval and vesting order is granted.

[15] The conduct of the MMA as described in the Fourth Report and the Inspectors also described in the Fourth Report was appropriate, reasonable and consistent with the mandate given. The activities are approved.

[16] I am also satisfied that it is appropriate to grant a sealing order in respect of the Confidential Appendix to the Fourth Report to be in effect until the earlier of the closing of the Transaction or further order of the Court.

[17] The sealing order is limited in both scope and time and is appropriate to ensure the integrity of the sales process and to minimize the risk of prejudice in the event that the Transaction does not close, and the property must be marketed and sold again. Indeed, that very risk came to pass here with respect to the first failed transaction, heightening the appropriateness of the sealing order now. The Confidential Appendix contains an unredacted copy of the APS which discloses the Purchase Price and the amount of the Good Faith Deposit, both of which are commercially sensitive. I am satisfied that the factors set out by the Supreme Court of Canada in Sierra Club as refined in Sherman Estate have been satisfied. The sealing order is granted.

[18] Both the approval and vesting order and the ancillary order that I have signed today are effective immediately and without the necessity of issuing and entering.

Osborne J.