ONTARIO SUPERIOR COURT OF JUSTICE · 155 Wellington Street West Toronto, Ontario M5V 3J7 ALEXANDRIA...
Transcript of ONTARIO SUPERIOR COURT OF JUSTICE · 155 Wellington Street West Toronto, Ontario M5V 3J7 ALEXANDRIA...
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Court File No. CV-16-11565-OOCL
BETWEEN:
ONTARIOSUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
SIDNEY STREET PROPERTIES CORP.
Applicant
-and-
2428049 ONTARIO INC.
Respondent
MOTION RECORD(Returnable August 3, 2017)
July 27, 2017 FOGLER, RUBINOFF LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD CentreToronto, Ontario M5K 1 G8
Vern W. Dane (LSUC# 32591 E)Tel: 416-941-8842Fax: 416-941-8852
Lawyers for the court-appointed Receiverof the Respondent, BDO Canada Limited
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TO: Service List
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SERVICE LIST(Updated on July 27, 2017)
TO: 2428049 ONTARIO INC.
904 County Road 11
Napanee, Ontario K7R 3L2
KARL HOLLETT (President)
cc: Civis Law LLP, 36 Toronto Street, Suite 850, Toronto, Ontario M5C 2CSAttention Jeffrey J. Kroeker (email: jkroeker(c~civislaw.ca)
AND TO: BALDWIN LAW Professional Corporation
54 Victoria Avenue
P.O. Box 1537
Belleville, Ontario K8N 5J2
IAN W. BRADY/GREGORY PARKER
Tel: 613-771-9991
Fax: 613-771-9998
Email: ibradvC~baldwinlaw.ca / gparker(a~baldwinlaw.ca
Lawyers for the Applicant, Sidney Street Properties Corp.
AND TO: BAKER & McKENZIE LLP
181 Bay Street
Suite 2100
Toronto, Ontario M5J 2T3
KENT BEATTIE
Tel: 416.865.2304
Fax: 416.863.6275
Email: kent.beattieCa.bakermckenzie.com
Lawyers for Avaya Canada Corp.
AND TO: JUSTICE CANADA
Tax Section
130 King Street West
Suite 3400, P.O. Box 36, Exchange Tower
Toronto, Ontario M5X 1 K6
DIANE H.A. WINTERS
Tel: 416-973-3172
Fax: 416-973-0810
Email: [email protected]
AND TO: MINISTRY OF FINANCE
Legal Services Branch
33 King Street West, 6th Floor
Oshawa, Ontario L1 H 8H5
KEVIN O'HARA
Email: Kevin.ohara(c~ontario.ca
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AND TO: DAVIES WARD PHILLIPS 8~ VINEBERG LLP ''
155 Wellington Street West
Toronto, Ontario M5V 3J7
ALEXANDRIA J. PIKE
Tel: 416-367-6989
Fax: 416-597-4194
Email: apike(c.~dwpv.com
Lawyers for Nortel Networks Limited
AND TO: TEMPLEMAN MENNINGA LLP
205 Dundas Street East
Suite 200
Belleville, Ontario K8N 5A2
DAVID W. DEMILLE /TODD STORMS
Tel: 613-966-2620
Fax: 613-966-2866
Email: dwd(a~tmlegal.ca
Lawyers for the Corporation of the City of Belleville
AND TO: GOODMANS LLP
333 Bay Street
Suite 3400, Bay Adelaide Centre
Toronto, Ontario M5H 2S7
JAY CARFAGNINI /JOSEPH PASQUARIELLO /CHRIS ARMSTRONG
Tel: 416-597-4107
Fax: 416-979-1234
Email: [email protected] / Ipasquariello(a~goodmans.ca /carmstrong(c~goodmans.ca
Lawyers for the Monitor in Nortels' CCAA proceedings, Ernst &Young Inc.
AND TO: BORDEN LADNER GERVAIS LLP
22 Adelaide Street West
Bay Adelaide Centre
Toronto, Ontario M5H 4E3
JAMES W. MACLELLAN
Tel: 416 367-6592
Fax: 416 367-6749
Email: jmaclellan(c(c~blg.com
Lawyers for Trisura Guarantee Insurance Company
AND TO: RCAP LEASING INC.
5575 North Service Rd., Suite 300
Burlington, Ontario L7L 6M1
LAURA POLLOCK (Collections Officer)
Email: reap.collections(c~rcapleasinq.com
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AND TO: LIPMAN, ZENER & WAXMAN
1220 Eglinton Avenue West
Toronto, Ontario M6C 2E3
ANTHONY O'BRIEN
Tel: 416-789-0652
Fax: 416-789-9015
Email: tobrien Izwlaw.com
Lawyers for Business Development Bank of Canada
AND TO: ATTORNEY GENERAL FOR ONTARIO
Ministry of the Environment and Climate Change
Legal Services Branch
135 St. Clair Avenue West, 10th Floor
Toronto, Ontario M4V 1 P5
PAUL MCCULLOCH
Tel: 613-521-3450 x234
Fax: 416-314-6579
Email: PauI.McCulloch(c~ontario.ca
DANIELLE MEULEMAN
Tel: 416-314-7605
Fax: 416-314-6579
Email: danielle.meuleman(c~ontario.ca
Lawyers for Her Majesty the Queen in Right of Ontario, as represented by the Ministry ofthe Environment
AND TO: MINDEN GROSS LLP
145 King Street West
Suite 2200
Toronto, Ontario M5H 4G2
RACHEL MOSES
Tel: 416-369-4115
Fax: 416-864-9223
Email: rmoses ,mindengross.com
Lawyers for Royal Bank of Canada
AND TO: O'FLYNN WEESE LLP
65 Bridge Street East
Belleville, Ontario
K8N 1 L8
JOHN MASTORAKOS
Tel: 613-966-5222
Fax: 613-961-7991
Email: jmastorakos(c~owtlaw.com
Lawyers for Hamilton Smith Limited
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AND TO: DICKINSON WRIGHT LLP
199 Bay Street
Suite 2200
Toronto, Ontario M5L 1 G4
MICHAEL J. BRZEZINSKI
Tel: 416-777-2394
Fax: 844-670-6009
Email: mbrzezinski(u~dickinsonwright.com
Lawyers for Fuller Landau LLP, Court-appointed receiver of Strathcona Energy Group Inc.and Fath PV Tech Inc.
AND TO: msi Spergel inc.
Licensed Insolvency Trustee
505 Consumers Road, Suite 200
Toronto, Ontario M2J 4V8
PHILIP H. GENNIS
Tel: 416-498-4325
Fax: 416-498-4325
Email: ~gennis ,spergel.ca
Private Receiver of Strathcona Energy Group Inc. and Fath PV Tech Inc.
AND TO: SYSCO CANADA, INC., c.o.b. as Sysco Central Ontario
63 Elmdale Rd., R.R. #3
Peterborough, Ontario
K9J 7B1
AND TO: Leonard de Vries
Barrister &Solicitor
5255 Yonge Street, Suite 1300,
Toronto, Ontario
M2N 6P4
Tel: (416) 924-8082
Fax: (416) 927-0305
Email: devries(a~on.aibn.com
Lawyer for Prospective Purchaser
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Court File No. CV-16-11565-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
BETWEEN:
SIDNEY STREET PROPERTIES CORP.
/• • •
- and
2428049 ONTARIO INC.
Respondent
INDEX
TAB DOCUMENT
1 Notice of Motion (Returnable August 3, 2017)
2 Second Report of the Receiver dated July 27, 2017
A Receivership Order of Justice Penny dated December 13, 2016
B Receiver's First Report dated January 30, 2017 (excluding appendices)
C Order of Justice Hainey dated February 9, 2017
D Listing Agreement
E Commission Invoice
F Security Opinion of Fogier, Rubinoff LLP dated July 19, 2017
G Property Tax Statements
H CRA Property Claim — Payroii Source Deductions
CRA Notice of Assessment —HST
J CRA Auditor's HST Arrears Schedule
K Hamilton Smith Limited Judgement dated July 12, 2016
L Receiver's R&D Statement
M BDO Canada Limited Fee Affidavit
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N Fogler, Rubinoff LLP Fee Affidavit
CONFIDENTIAL APPENDICES
(Confidential) Offer to Purchase dated June 1, 2017 (including amendments)
2 (Confidential) Key Financial Terms of Sale Agreement
3 Draft Approval and Vesting Order
4 Modei Approval and Vesting Order (Blacklined)
5 Draft Discharge Order
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Court File No. CV-16-11565-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST]
BETWEEN:
SIDNEY STREET PROPERTIES CORP.
Applicant
- and-
2428049 ONTARIO INC.
Respondent
NOTICE OF MOTION(Returnable August 3, 2017)
BDO Canada Limited, the court-appointed receiver (the "Receiver") of the
property, assets and undertakings of 2428049 Ontario Inc. (the "Debtor"), will make a motion to
the Court on Thursday, August 3, 2017 at 10:00 a.m., or as soon after that time as the motion
can be heard at 330 University Avenue, 8th Floor, Toronto, Ontario.
THE PROPOSED METHOD OF HEARING:
The motion is to be heard orally.
THE MOTION IS FOR an order:
1. validating the service of this Notice of Motion, the Motion Record and the Second Report
of the Receiver dated July 27, 2017 (the "Second Report") so that this Motion is
properly returnable August 3, 2017 and dispensing with further service thereof;
2. approving the Second Report and the activities of the Receiver as described therein;
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3. approving the sale transaction regarding the real property of the Debtor located at 250
Sidney Street, Belleville, Ontario (the "Belleville Property") contemplated by the Offer
to Purchase fully executed on June 1, 2017, as amended (the "Sale Agreement")
between the Receiver and Toronto Capital Corp. (as it so assigns) (the "Purchaser")
and accepted by Sidney Street Properties Corp., Rentx Properties Corp. and Rentx
Transportation Services Corp., and upon closing the sale transaction pursuant to the
Sale Agreement, vesting in the Purchaser the Debtor's right, title and interest in and to
the assets or property described in the Sale Agreement, free and clear of any claims and
encumbrances except for permitted encumbrances;
4. approving the sealing of Confidential Appendices "1" and "2" to the Second Report until
the closing of the sale transaction or further order of this Court;
5. approving the amended or discounted real estate commission with respect to the sale
transaction under the Sale Agreement;
6. approving the Receiver's Statement of Receipts and Disbursements included in the
Second Report;
7. approving the fees and disbursements of the Receiver and its counsel and the
Professional Fee Reserve as set out in the Second Report;
8. subject to the payment of certain remaining items including outstanding property taxes,
WEPPA, Receiver's Borrowing Certificates and appropriate reserves or holdbacks being
maintained by the Receiver from the cash at hand to pay all outstanding and future
professional fees, authorizing and directing the Receiver to make a distribution of any
remaining funds in its possession to the Canada Revenue Agency ("CRA") in respect of
its deemed trust claims, as described in the Second Report;
9. discharging and releasing BDO Canada Limited as Receiver of the Respondent; and
10. such further relief as is just.
THE GROUNDS FOR THE MOTION ARE:
1. Pursuant to the Order (appointing Receiver) of the Court dated December 13, 2016 (the
"Receivership Order"), BDO Canada Limited was appointed Receiver with limited
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powers and duties with respect to the assets, property and undertakings of the Debtor
(the "Property");
2. The Receivership Order authorizes the Receiver to, inter alia, market and sell the
Belleville Property, including advertising and soliciting offers in respect of the Belleville
Property or any part or parts thereof and negotiating such terms and conditions of sale
as the Receiver in its discretion may deem appropriate; and apply for any vesting order
to convey the Belleville Property (s. 3(c), (d) and (e));
3. The Sale Agreement includes a condition that the Receiver must apply to the Court and
obtain an order approving the sale transaction and vesting the purchased assets or
property in the Purchaser generally free of ail claims and encumbrances;
4. The Receiver recommends the sale of the Belleville Property to the Purchaser as
described in the Second Report;
5. The Debtor's major creditor or first mortgagee, Sidney Street Properties Corp., supports
or does not oppose the proposed sale of the Belleville Property to the Purchaser;
6. Upon completion of the sale of the Belleville Property on or before August 10, 2017
pursuant to the Sale Agreement, there will be no or few other assets or property of the
Debtor of realizable value that need to be considered or dealt with by the Receiver;
7. After the sale of the Belleville Property pursuant to the Sale Agreement, the Receiver will
be in a position to complete and conclude the administration of this receivership;
8. Subject to the payment of certain remaining items including outstanding property taxes,
WEPPA, Receiver's Borrowing Certificates and appropriate reserves or holdbacks being
maintained by the Receiver from the cash at hand to pay all outstanding and future
professional fees as described in the Second Report, any net funds or funds remaining
wii~ be distributed to the CRA;
9. the Applicant is supportive of the discharge of the Receiver; and
10. Such further grounds as are just.
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THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the Motion:
1. the Second Report of the Receiver; and
2. such further and other materials as counsel may advise and this Honourable Court may
permit.
Date: July 27, 2017 FOGLER, RUBINOFF LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD CentreToronto, Ontario M5K 1 G8
Vern W. Dane (LSUC# 32591 E)Tei: 416-941-8842Fax: 416-941-8852
Lawyers for the court-appointed Receiverof the Respondent, BDO Canada Limited
TO: Service List
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SIDNEY STREET PROPERTIES CORP. -and - 2428049 ONTARIO INC.
Applicant Respondent
Court File No. CV-16-11565-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
Proceedings commenced at Toronto
NOTICE OF MOTION
FOGLER, RUBINOFF LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD CentreToronto, Ontario M5K 1 G8
Vern W. Dane (LSUC# 32591 E)Tel: 416-941-8842Fax: 416-941-8852
Lawyers for the court-appointed Receiverof the Respondent, BDO Canada Limited
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Court File No. CV-16-11565-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
SIDNEY STREET PROPERTIES CORP.Applicant
and -
2428049 ONTARIO INC.
Respondent
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCYACT, R.S.0 1985, c. B-3 AS AMENDED AND SECTION 101 OF THE COURTS OF JUSTICE
ACT, R.S.O 1990, c. C. 43, AS AMENDED
SECOND REPORT OF BDO CANADA LIMITED, IN ITS CAPACITYAS COURT APPOINTED RECEIVEROF 2428049 ONTARIO INC.
JULY 27, 2017
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INTRODUCTION AND BACKGROUND ............................................................................... 4
Introduction ......................................................................................................................4
Purpose of this Report ....................................................................................................5
Disclaimer..........................................................................................................................6
Background........................................................................................................................7
ACTIVITIES OF THE RECEIVER .........................................................................................9
SALE OF THE BELLEVILLE PROPERTY ..........................................................................10
Sales Commission ...........................................................................................................11
Sealing..............................................................................................................................12
SECURITY OPINION .........................................................................................................12
PRIORITY PAYABLES/DEEMED TRUSTS ........................................................................13
Property Taxes ................................................................................................................13
WEPPA Claim ................................................................................................................... 13
CRA Deemed Trusts ........................................................................................................13
Other Creditors ...............................................................................................................15
RECEIVER'S BORROWINGS .............................................................................................16
RECEIPTS AND DISBURSEMENTS ....................................................................................17
PROFESSIONAL FEES AND DISBURSEMENTS .................................................................17
DISCHARGE ...................................................................................................................... 19
SUMMARY AND RECOMMENDATIONS ............................................................................ 19
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APPENDICES
A Receivership Order of Justice Penny dated December 13, 2016
B Receiver's First Report dated January 30, 2017 (excluding appendices)
C Order of Justice Hainey dated February 9, 2017
D Listing Agreement
E Commission Invoice
F Security Opinion of Fogler, Rubinoff LLP dated July 19, 2017
G Property Tax Statements
H CRA Property Claim -Payroll Source Deductions
CRA Notice of Assessment -HST
J CRA Auditor's HST Arrears Schedule
K Hamilton Smith Limited Judgement dated July 12, 2016
L Receiver's R&tD Statement
M BDO Canada Limited Fee Affidavit
N Fogler, Rubinoff LLP Fee Affidavit
CONFIDENTIAL APPENDICES
1 Offer to Purchase Dated June 1, 2017 (including amendments)
2 Key Financial Terms of Sale Agreement
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INTRODUCTION AND BACKGROUND
Introduction
1. By Order of the Honourable Justice Penny of the Ontario Superior Court of Justice
(the "Court") dated December 13, 2016 (the "Receivership Order"), BDO Canada
Limited was appointed as receiver ("BDO" or the "Receiver") of the assets, properties
and undertakings of 2428049 Ontario Inc. ("242" or the "Debtor") pursuant to the
application of Sidney Street Properties Corp. ("Sidney" or the "Applicant"). A copy of
the Receivership Order is included hereto as Appendix A.
2. The Applicant is the first mortgagee over the Debtor's real property municipally
known as 250 Sidney Street, Belleville, Ontario (the "Belleville Property"). The
Applicant does not hold any personal or corporate guarantees in respect of the first
mortgage.
3. Pursuant to the Receivership Order, BDO was appointed Receiver with limited
powers and duties with respect to the assets, property and undertakings of the Debtor.
The Receivership Order explicitly provides that the Debtor shall remain in possession
and control of the Belleville Property and that the Receiver shall not possess, control,
hold, administer and manage the Belleville Property.
4. Pursuant to the Order of Justice Hainey in these proceedings dated February 9,
2017, (the "Rainey Order") this Court ordered or authorized that, among other things:
(i) the Receiver list the Belleville Property for sale with D.W. Gould Realty Advisors Inc.
("Gould") at a list price of $3.1 million as recommended by the Receiver in its First
Report dated January 30, 2017 (the "First Report") attached as Appendix B (excluding
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exhibits); (ii) Sidney operate, administer and manage the Belleville Property during this
Receivership; and Sidney be paid for its future costs or expenses regarding the
administration and management of the Belleville Property by the issuance of Receiver's
Certificates; and (iii) authorized the Receiver in its own discretion, without further
order of the Court, to use or apply the rental money or funds collected from the tenants
of the Belleville Property in order to fund the Debtor's operating costs during the
receivership. A copy of the Hainey Order is included hereto as Appendix C.
Purpose of this Report
5. The purposes of this report dated July 27, 2017 (the "Second Report") are to:
a) seek the Court's approval of the Second Report and the activities of the
Receiver set out herein;
b) seek the Court's approval of the sale transaction for the Belleville
Property contemplated by the Offer to Purchase fully executed on June
1, 2017, as amended (the "Sale Agreement") between the Receiver and
Toronto Capital Corp. (as it so assigns) (the "Purchaser") and accepted
by Sidney, Rentx Properties Corp. and Rentx Transportation Services
Corp.;
c) seek the Court's approval to vest the Debtor's right, title and interest in
and to the assets or property described in the Sale Agreement, free and
clear of any claims and encumbrances, except for permitted
encumbrances, in the Purchaser upon closing the sale transaction
pursuant to the Sale Agreement;
d) seek the Court's approval to seal Confidential Appendices 1 and 2 to the
Second Report until the closing of the sale transaction or further order of
this Court to preserve the integrity of the Receiver's sate process;
e) seek the Court's approval for the Receiver to sign Gould's invoice thereby
amending the terms of the Listing Agreement to limit Gould's sale
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commission to $30,000 plus HST on the proposed sale transaction with
the Purchaser.
f) seek the Court's approval of the Receiver's Statement of Receipts and
Disbursements (the "R£tD Statement") included in the Second Report;
~) seek the Court's approval of the fees and disbursements of the Receiver
and its legal counsel, Fogler, Rubinoff LLP ("Fog(er") as set out in this
Second Report, and authorize the Receiver to pay all approved and unpaid
fees and disbursements and the Professional Fee Reserve (defined
below).
h) subject to funding certain remaining operating expenses incurred by the
Debtor, payment of outstanding property taxes, payment of the WEPPA
claim, repayment of the Receiver's borrowing pursuant to the Receiver's
Certificates and appropriate reserves or holdbacks being maintained by
the Receiver from the cash at hand to pay all outstanding and future
professional fees, authorizing and directing the Receiver to make a
distribution of any remaining funds in its possession to the Canada
Revenue Agency ("CRA") in respect of its deemed trust claims, as
described in the Second Report; and
i) seek the discharge and release of BDO as Receiver over the Debtor's
assets, properties, and undertakings.
Disclaimer
6. This Second Report is prepared solely for the use of the Court for the purpose of
assisting the Court in making a determination whether to approve: (i) the sale of the
Belleville Property; (ii) a Final Distribution (defined later) by the Receiver to CRA; (iii)
the discharge of BDO as Receiver; and (iv) other ancillary relief being sought.
7. Unless otherwise stated, all monetary amounts contained in this First Report are
expressed in Canadian dollars.
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Background
8. 242 is an Ontario corporation. The Receiver understands that Karl Holtett is the
President, Secretary and sole director of 242. The Debtor's sole purpose appears to be
that of ownership of the Belleville Property.
9. The Belleville Property consists of approximately 33 acres of land with a 305,000
square foot building and ancillary buildings currently occupied by 4 tenants; the anchor
tenant being Avaya Canada Corp. ("Avaya").
10. 242 has owned the Belleville Property since October 15, 2014 when it acquired
the property from Sidney and Palmer Road Properties Corp. ("Palmer") for $3.1 million.
As security for the sale of the Belleville Property, Sidney was granted by 242 a vendor-
take-back mortgage in the principal amount of $2.17 million pursuant to
Charge/Mortgage dated October 15, 2014 (the "Mortgage") that was registered against
the Belleville Property. A copy of the Mortgage was included as Appendix B to the First
Report.
1 1. Given the significant environmental problems associated with the Belleville
Property, the Ministry of Environment, now the Ministry of the Environment and Climate
Change ("MOECC"), registered a Certificate of Requirement against title to the
Belleville Property on September 19, 2011 pursuant to the Environmental Protection Act
with respect to certain Director's Orders and related proceedings before the
Environmental Review Tribunal.
12. The Belleville Property was originally owned by Nortel Networks Limited
("Nortel") or its corporate predecessors and has significant environmental issues
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allegedly caused by the manufacturing of electrical components for the
telecommunications industry. The environmental issues associated with the Belleville
Property, and other impacted properties owned by Nortel, have been dealt with by this
Court in Nortel's proceedings under the Companies' Creditors Arrangement Act (the
"CCAA").
1 3. It is the Receiver's understanding that in the Nortel CCAA proceedings, a reserve
of approximately $100 million or more has been established in respect of the continuing
performance obligations of Nortel pursuant to the MOECC Orders, including the MOECC
Order on the Belleville Property.
14. Sidney and a related company have filed a claim in the Nortel CCAA proceedings
in relation to the alleged obligations of Nortel owing to them regarding the
environmental remediation of the Belleville Property.
15. Past, current and future owners of the Belleville Property, including Sidney as a
past owner, are allegedly subject to the MOECC Director's Order regarding the Belleville
Property and the related proceedings before the Environmental Review Tribunal.
16. The Debtor is currently in default of its obligations under the Mortgage ultimately
leading to this receivership proceeding. As of July 28, 2016, 242 was indebted to the
Sidney in the amount of $1,824,415.74 (the "Indebtedness"). Sidney reports that the
Indebtedness will exceed $2.0 million by August 10, 2017, the expected closing date of
the sale transaction with the Purchaser.
17. Further alleged background information leading up to the receivership
proceeding and outlining in further detail the alleged history of environmental
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contamination at the Belleville Property and the ongoing environmental work and
remediation at the Belleville Property is included in the affidavit of Bernard D. Ouellet
sworn October 13, 2016 attached, without exhibits, as Appendix C to the First Report.
ACTIVITIES OF THE RECEIVER
18. Pursuant to the Receivership Order, the following is a summary of the more
salient activities of the Receiver since the First Report:
(a) Collecting rents from the commercial tenants;
(b) Listing the Belleville Property for sale with Gould;
(c) Negotiating the sale agreement for the Belleville Property with the Purchaser
and Sidney;
(d) Continuing to liaise with the insurance adjuster, Intact Insurance, to recover
funds under an insurance claim covering the costs associated with the
replacement of a "blown" transformer;
(e) Settling a rent dispute with Avaya;
(f) Regarding the alleged post-receivership occupation rent or storage costs
owing in relation to Strathcona's tenancy at the Belleville Property as
described in the First Report, Minutes of Settlement were entered by the
Receiver, The Fuller Landau Group Inc., and msi Spergel inc., the latter two
being the receivers of Strathcona, on or about March 31, 2017 (the
"Settlement"}. Under the Settlement, among other things, the Receiver was
paid approximately $40,000 towards occupation rent.
(~) Providing funding to 242 so that it can continue to pay its ongoing operating
costs and building maintenance expenses; and
(h) Dealing with tenant and creditor inquiries.
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SALE OF THE BELLEVILLE PROPERTY
19. Pursuant to the Hainey Order, the Receiver listed the Belleville Property for $3.1
million with Gould. A copy of the Listing Agreement is attached as Appendix D.
20. To date, a single offer has been received for the Belleville Property. The Offer
to Purchase, as dated June 1, 2017 and subsequently amended is from the Purchaser. A
copy of the Offer to Purchase including amendments is included as Confidential
Appendix 1.
21. The key financial terms of the Sale Agreement are disclosed in Confidential
Appendix 2. A summary, on a redacted basis, of some of the key terms include: (i)
cash paid to the Receiver is to be in the amount of $430,000: a deposit of $72,000 was
delivered with the offer; a further deposit of $278,000 is to be delivered upon the
Purchaser waiving certain conditions; and the Receiver keeps the rent adjustment for
August, 2017 in the approximate amount of $80,000; (ii) that a significant portion of
the purchase price is to be covered by a first mortgage granted by the Purchaser over
title to the Belleville Property in favour of Sidney; (iii) the sale is on an "as is, where is"
basis; (iv) the sale is scheduled to close on or before August 10, 2017; and (v) the sale
is subject to an approval and vesting order being granted by this Court.
22. The MOECC Director's Order will not be affected by the approval and vesting
order, in that it will be listed as a permitted encumbrance in the approval and vesting
order. Consequently, the Purchaser is willing to close the sale transaction
notwithstanding the significant potential environmental liability associated with
ownership of the Belleville Property.
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23. The Receiver is recommending the Court's approval of the Sale Agreement for
the following reasons: (i) the significant environmental issues facing the Belleville
Property and the potential liability to any party purchasing the property has made this
offer the "only game in town"; (ii) any purchaser is not likely to obtain traditional bank
financing for this type of transaction because of the property's environmental issues,
further reducing the market; (iii) the high risk nature of this real estate opportunity is
a further impediment to a robust market; and (iv) the lengthy timeframe likely required
to attract a buyer in the circumstances.
24. The Receiver is also of the view that Gould exposed the Belleville Property to
the public for a reasonable time and brought this risky real estate opportunity to the
public's attention. The Purchaser's offer arising from the listing of the Belleville
Property in the Receiver's opinion is the best offer that could be obtained in the
circumstances.
25. The Debtor's major creditor or first mortgagee, Sidney, supports the proposed
sale of the Belleville Property to the Purchaser.
Sales Commission
26. Gould is entitled to a sales commission of the greater of 5% of the purchase price
or the lesser of the purchase price or $75,000. Gould's commission rate was structured
as such to ensure that Gould would be properly compensated for its services given the
high risk nature of this real estate opportunity considering the environmental challenges
with the Belleville Property.
27. Notwithstanding the commission structure set out in the Listing Agreement,
Sidney subsequently negotiated with Gould and the latter provided the Receiver with
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an invoice discounting the sales commission on the proposed sale to the Purchaser to
$30,000 plus HST. A copy of Gould's commission invoice is appended hereto as Appendix
E. In the circumstances, the Receiver is seeking the Court's approval for the Receiver
to sign the invoice as contemplated thereby limiting the sales commission payable to
Gould to $30,000 plus HST in respect of the proposed sale to the Purchaser.
Seating
28. The Receiver is requesting an order sealing Confidential Appendices 1 and 2 to
the Second Report, namely a summary of the key financial terms and the Sale
Agreement, to prevent any prejudice to the sale process or listing if the sate transaction
does not close.
29. Upon completion of the sale of the Belleville Property on or before August 10,
2017 pursuant to the Sale Agreement, there will be no other or few assets or property
of the Debtor of realizable value that need to be considered or dealt with by the
Receiver.
SECURITY OPINION
30. The Receiver engaged Fogler as independent legal counsel and requested that it
provide the Receiver with a security opinion on the validity and enforceability of the
Mortgage. The Receiver received a security opinion from Fogler, which subject to the
assumptions and qualifications set out in the security opinion of Fogler, confirms the
validity and enforceability of the Mortgage. A copy of the Fogler security opinion is
attached hereto as Appendix F.
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PRIORITY PAYABLES/DEEMED TRUSTS
Property Taxes
31. The Receiver understands that as of July 24, 2017 approximately $290,000, in
outstanding property taxes are due to the City of Belleville and form a first charge on
the Belleville Property ahead of Sidney's Mortgage. The outstanding property taxes are
anticipated to be paid out of the sale proceeds on the closing of the proposed sale
transaction with the Purchaser. Copies of the property tax accounts for the Belleville
Property are attached as Appendix G. The outstanding property taxes, including
accrued interest, are estimated to be approximately $294,000 on August 10, 2017, the
expected sale closing date.
WEPPA Claim
32. The Receiver has also determined that up to $2,166.30 is payable by the
Receiver, out of any recovery from the current assets of 242, in respect of subrogated
employee claims under WEPPA that are otherwise payable by the Receiver under Section
81.4 (1) of the Bankruptcy and Insolvency Act. This subrogated employee claim payable
to Service Canada has a priority over repayment of borrowed funds under the Receiver's
Certificates pursuant to the borrowing provisions contained in the Receivership Order.
CRA Deemed Trusts
33. The Receiver has received a property claim from CRA in respect of unremitted
payroll source deductions in the amounts of $25,090.37. A copy of CRA's deemed trust
claim is attached hereto as Appendix H.
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34. Pursuant to subsection 227(4.1) of the Income Tax Act ("ITA"), the Crown is
granted the right to recover first as against all of the tax debtor's property, in advance
of all other "security interests" (a broadly defined term including all charges and liens
on property). The only exception to this "super priority" is set out in subsection 227(4.2)
of the ITA, which carves out a "prescribed security interest" from the definition of
"security interest".
35. The Receiver is also aware of the Debtor's HST arrears totaling approximately
$211,000 dating as far back as June 30, 2015. Attached as Appendix I is the most recent
Notice of Assessment received from CRA. Additionally, the Receiver received a
breakdown of the HST from the CRA auditor also attached in Appendix J. The Receiver
expects to receive a deemed trust claim from CRA in the near future in respect of the
outstanding HST liability.
36. Subsection 222(1) of the Excise Tax Act ("ETA") creates a trust for collected but
unremitted HST/GST which attaches to and is impressed upon all real and personal
property of the debtor. All monies received by a debtor in respect of HST/GST,
notwithstanding any "security interest" which may otherwise be in effect as against the
debtor's property, are accepted subject to the trust and deemed to be held separate
and apart from all other property of the debtor. As set out in subsection 222(4] of the
ETA, for the purpose of the "super priority" created in subsection 222(3), a "security
interest" does not include a "prescribed security interest".
37. As provided for under each of the ITA and the ETA in respect of the deemed
trusts for payroll source deductions and HST/GST respectively, a "prescribed security
interest" means the part of a mortgage securing the performance of an obligation of the
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tax debtor which was registered against real property before the arrears over which the
deemed trust attaches arose.
38. Given that the Mortgage predates the arrears over which CRA's aforementioned
deemed trusts arose, the Receiver is advised by its counsel that the Mortgage registered
in October 2014 by Sydney against the Belleville Property qualifies as a "prescribed
security interest" under both the ITA and ETA. Accordingly, the Mortgage would appear
to have priority ahead of CRA's deemed trust claims. Essentially, failure by 242 to remit
HST and payroll source deductions did not benefit the mortgagee since the Mortgage
was registered before 242's obligations to CRA arose.
Other Creditors
39. Hamilton Smith Limited ("Hamilton") registered a construction lien in the land
registry office against title to the Belleville Property in the amount of $100,491 on
August 5, 2015 for what appears to be a breach of contract claim. A copy of the
Judgement dated July 12, 2016 obtained by Hamilton referencing the lien is included
hereto as Appendix K.
40. The Hamilton construction lien was registered in the land registry system
subsequent to the Mortgage. The Mortgage was not a building mortgage but rather a
prior non-building mortgage as defined under the Construction Lien Act ("CLA"). No
advances were made by Sidney to 242 after Hamilton's construction lien arose.
Therefore, the Receiver is advised by its counsel that pursuant to the exemptions set
forth in section 78(3) of the CLA, the Mortgage appears to have priority to Hamilton's
lien equal to lesser of i) value of the Belleville Property when lien first arose ($3.1
million); or ii) total advances before the lien arose ($2.17 million). Additionally, the
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Receiver is advised that the Hamilton construction lien appears to be subordinate to the
deemed trust claims of CRA.
41. Other secured creditors of 242 include RCAP Leasing Inc. ("RCAP") and Trisura
Guarantee Insurance Company ("Trisura"). These secured creditors' security interests
appear to be over the personal property of 242. A copy of the Persona( Property Security
Act search against 242 as of December 19, 2016 was attached as Appendix J to the First
Report.
42. Finally, Hamilton Smith Limited and Sysco Canada, Inc. appear to be post-
Mortgage, execution creditors of 242.
43. These aforementioned creditors will be served with the Receiver's motion record
returnable August 3, 2017 and will be able to appear and make submissions to the Court
they feel are appropriate in the circumstances.
RECEIVER'S BORROWINGS
44. The Receiver borrowed $75,000 from Sidney through the issuance of Receiver's
Certificates in order to provide 242 with adequate funding to pay ongoing operating
costs and cover maintenance and repairs costs to preserve the value of the Belleville
Property for the benefit of the creditors.
45. The Receiver's Certificates bear interest at an annual interest rate of 10% which
was negotiated with Sidney. Sidney was the only logical party that would provide
funding to the Receiver in the circumstances.
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46. The Receiver intends on repaying the Receiver's Certificates, plus accrued
interest, to Sidney, from any funds remaining in the estate, after payment of the
subrogated employee claims owing to Service Canada totaling $2,166.30 that are
otherwise payable by the Receiver under Section 81.4 (1) of the Bankruptcy and
Insolvency Act, following the closing of the sale transaction with the Purchaser.
RECEIPTS AND DISBURSEMENTS
47. The R~tD Statement, appended hereto as Appendix L, reports net receipts over
disbursements for the period of $109,923.42, before provision for payment of future
operating disbursements, outstanding property taxes, Receiver's borrowings, WEPPA
and outstanding and future professional fees of the Receiver and its counsel.
48. Following payment of the outstanding property taxes, WEPPA, the Receiver's
borrowings, and outstanding professional fees and the Professional Fee Reserve (defined
below), the Receiver seeks approval to distribute all remaining estate funds to CRA in
respect of its deemed trust claims up to the amount of its indebtedness (the "Final
Distribution").
PROFESSIONAL FEES AND DISBURSEMENTS
49. Pursuant to the Receivership Order, the Receiver has provided services and
incurred disbursements which are more particularly described in the affidavit and
detailed invoices attached hereto as Appendix M.
50. The detailed time descriptions contained in the invoices provide a fair and
accurate description of the services provided and the amounts charged by BDO as
Receiver. Included with the invoices is a summary of the time charges of partners and
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staff, whose services are reflected in the invoices, including the total fees and hours
billed.
51. Additionally, the Receiver has incurred legal fees of its counsel in respect of
these proceedings, as more particularly set out in the fee affidavit and exhibits attached
hereto as Appendix N.
52. The Receiver has reviewed Fogler's fee affidavit and believes same to be fair
and reasonable in the circumstances.
53. The Receiver requests that the Court approve its accounts for the periods from
September 15, 2016 to November 2, 2016 and January 30, 2017 to July 26, 2017 in the
amount of $54,276.14 for fees and disbursements including HST of $7,055.90, for a total
of $61,332.04 plus the amount of $10,000, plus HST, to complete the administration of
the estate.
54. The Receiver also requests that the Court approve the accounts of its legal
counsel for the period from October 27, 2016 to November 8, 2016 and January 29, 2017
to June 21, 2017 in the amount of $64,913.61 for fees and disbursements including HST
of $8,417.96, for a total of $73,331.57 plus the amount of $15,000, plus HST, to
complete the administration of the estate.
55. As stated, the Receiver estimates that it will incur $28,250 in future professional
fees to complete the administration of the estate consisting of $25,000 in future
professional fees of the Receiver and its counsel plus HST of $3,250 (the "Professional
Fee Reserve").
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DISCHARGE
56. After the sale of the Belleville Property pursuant to the Sate Agreement, the
Receiver will be in a position to complete and conclude the administration of this
receivership.
57. Alt of the Receiver's duties as set out in the Receivership Order will be completed
upon: i) filing the final estate HST returns to recover any unclaimed input tax credits;
ii) making the Final Distribution and iii) filing the Receiver's final report pursuant to S.
246(3) of the Bankruptcy and Insolvency Act with the Office of the Superintendent of
Bankruptcy. Once the Receiver has completed these activities, the Receiver proposes
to file a Receiver's Certificate with the Court certifying same to obtain a discharge and
release over the undertaking, property and assets of the Debtor.
58. The expeditious completion of the Receivership will avoid the costs of additional
Court appearances and reduce any potential confusion in the market with respect to the
status of the Debtor or the new ownership of the Belleville Property.
59. The Applicant is supportive of the discharge of the Receiver.
SUMMARY AND RECOMMENDATIONS
60. Based on the foregoing, the Receiver recommends that the Court:
a) approve this Second Report of the Receiver, and the activities and
conduct of the Receiver set out herein;
b) approve the Sale Agreement and authorize the Receiver to complete the
transaction contemplated thereunder;
c) vest title in the Belleville Property in the Purchaser;
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d) seal Confidential Appendices 1 and 2 in order to preserve the integrity of
the sale processes and to protect this commercially sensitive financial
information until further Order of this Honourable Court;
e) approve the Receiver's R&~D Statement;
f) approve the fees and disbursements of the Receiver and its legal counsel,
Fogler, as set out in this Second Report, and authorize the Receiver to
pay all approved and unpaid fees and disbursements.
g) Approve the Final Distribution of any remaining funds in the estate to
CRA after closing the sale transaction with the Purchaser;
h) approve the discharge and release of BDO as Receiver of the assets,
properties and undertaking of the Debtor upon BDO filing the Receiver's
Certificate with the Court.
All of which is respectfully submitted this 27th day of July, 2017.
BDO CANADA LIMITED Court Appointed Receiver of2428049 Ontario Inc.Per:
Name: Gary Cerrato, CIRPTitle: Vice-President
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Court File No. CV-16-11565-OOCI~
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
THE HONOURABLE MR. ) TUESDAY, THE 13"'
JUSTICE PENNY ~ DAY OF DECEMBER, 2016
SIDNEY STREET PROPERTIES CORP.
-and-
2428049 ONTARIO 1NC.
ORDER
(appointing Receiver}
Applicant
Respondent
THIS APPLICATION made by Sidney Street Properties Corp. (the "Applicant" or "First
Mortgagee"} for an Order pursuant to section 243(1) of the Bankruptcy and Insolvency Act,
R.S.C. 1985, c. B-3, as amended (the "BIA") and section 101 of the Courts of Justice Act, R.S.O.
1990, c. C.43, as amended (the "CJA") appointing BDO Canada Limited as receiver {in such
capacities, the "Receiver") without security, to exercise the limited powers and duties as
specifically set out in this Order with respect to the assets, undertakings and properties of
2428049 ONTARIO INC. (the "Debtor") acquired for, or used in relation to a business carried on
by the Debtor, was heard this day at 330 University Avenue, "l~oronto, Ontario.
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ON READING the affidavit of Bernaz~d D. Ouellet sworn October 13. 2016 and the
[ xhibits there-to and on hearing the submissions of counsel for the Applicant, the proposed
Receiver and any other patty on the service list as duly served as appears from the affidavit o~t~
service of Heather• Peart sworn October 24, 2016 and oi~ reading the consent of BDO Canada
Limited to act as the Keceiver,
SERVICE
THIS COURT ORDERS that the time for service of tl~e Notice of Application and the
application is hereby abridged and validated so that this application is properly i~ettunable today
and hereby dispenses with filrther service thereof.
APPOINTMENT
2. THIS CC)URT ORDERS that pursuant to section 243(1) of the BIA and section 101 of
the CJA, I3D0 Canada Limited is hereby appointed Receiver, without security, to exercise the
limited powers and duties as specifically set out in this Order tivith respect to the assets,
undertakings and properties of the Debtor acquired for, or' used in relation to a business carried
on by tl~e Debtor, including all proceeds thereof (the "Property").
2A. TI-IIS COURT ORDERS that, notwithstanding anything to the contrary iii this Order, but
subject to the rights and remedies of the First Mortgagee and further Order of this Court, the
Debtor shall remain in the possession and control of the Property (including the real property
municipa]]y known as 250 Sidney Street, Belleville, Ontario (the "Belleville Property")) and for
greater• ceT-tainty, the Receiver shall not possess, control, hold, adinii7ister and manage tl~e
Belleville Property within the meaning of any Fnvii~onmenfal Legislation (as defined below).
2B. THIS COURT ORDERS that nothing in this Order shall affect or impair in any mamlel•
t1~e rights an~3 remedies of the First Nlortga~ee in respect oi~ the Property, btiit subject to the
Receiver's Charge (as defined below). F'or greater certainty, the First Mortgagee's priority, rights
and remedies in respect of the Prope~~ty shall be unaffected by the terms of this Order including
without limitation the Receiver's limited rights and dowers to deal with the Property, but shall be
subject to the Receiver's Charge (as defined below}.
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RTCI+.IVER'S POWERS
3. THIS COURT ORDERS that the Receiver is hereby expressly empowered and
authorized, but not obli;ated, to e;~ercise any of the followinb limited powers in respect of tilae
E'roperty where the Keceiver considers it necessary or desirable:
(a} to engage consultants, appraisers, agents, experts, auditors, accountants,
real estate agents, couiZsel and such other persons from time to time and on
whatever basis, including on a temporary basis, to assist with the exercise
of the Receiver's powers and duties, including without limitation those
conferred by this Order;
(b) to receive and collect all rezits iiow owed or hereafter owing to the Debtor
with respect to the Belleville Property and to exercise all remedies of the
Debtor in collecting such monies, _ _ __
(c) to market any oi• all of the Belleville Property, including advez•tising and
soliciting offers in respect of the Belleville Property or any part or parts
thereof and negotiating such terms and conditions of sale as the Keceiver
in its discretion may deem appropriate;
(d) to sell, convey, transfer, lease, assign, or sever under the Ontario Planning
Act, the Property ar any part or parts thereof otit of tl~e ordinary course of
business with the approval of this Court and in such transactio~l, notice
under subsection 63{4) of the Ontario Personal Pf-operly ,Security ~lct, or'
section 31 of the Ontario ~i~lor~tgages ~Ict, as the case 1~7ay be, shall not be
requit•eci, and in each case the Ontario 13u1k Sales Clef shall not apply.
(e) to apply for any vestinb order oz• other orders necessary to covey the
Belleville Property or a~1y part or• parts thereof to a purchaser or' purcl~asei•s
thereof, free and clear of ally liens or encur~~brances affecting such
Belleville Property;
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(f) to report to, meet with and discuss with such affected Persons (as def ned
below) as the Receiver deems appropriate on all matters relating to the
Property a~1d the receivership, and to share information, subject to such
terms as to eonfidenti~lity as the Receiver deems advisable;
(g) to register a copy of this Order and any otheT~ Orders iii respect of the
Belleville Property against title to any of the Belleville Property; at~d
{h) to take any steps reasonably incidental to the exet-cise of these powers or
the pet-formance of any statutory obligations,
and in each case where the Receiver takes any such actions or steps, it shall be exclusively
authorized and empowered to do so, to the exclusion of all other Persons (as defined below),
including the Debtor, and without intez-ference from any other Person.
llUTY TO PROVIDE ACCESS AND CO-OPERATION 'TO THL 1tECLIVEI2
4. THIS COURT ORDERS that (i) the Debtor, (ii) all of its cut~rent and former directors,
officers, employees, agents, accountants, legal counsel and shareholders, and all other persons
acting ~ on its instructions or behalf, and (iii) all other individuals, firms, cor}~orai3ons,
governmental bodies or abencies, or~ other entities having notice of this Oz•dcr (all 01' tl~e
foregoing, collectively, being "Persons" and each being a "Perso~l") shall forthwith advise the
Receiver of the existence of any P1~opei-ty in such Person's possession oi- control, shall grant
immediate and continued access to the Property to the Receiver, and shall deliver all such
Property do the Receiver upon the Receiver's request.
5. '1'~ IIS COURT ORDERS that all Persons shall forthwith advise the Keceiver of the
existence of any books, documents, securities, contracts, orders, corpoi-a~e and accounting
records, and any other papers, records and information of any kind related to the business or
affairs of t11e Debtot~, and any computer programs, computer takes, computer- disks, oz' other dada
storage media containing any such iirformation (the foregoing, collectively, t11e "Records") in
that Person's possession or control, and shall provide to the Receiver or permit the Receiver to
rnalce, retain and take away copies thereof and grant to the Receiver wlfettered access to and use
of accounting, computer, software and physical facilities relating the~~eto, provided however- that
1 771742v3
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nothing in this paragraph 5 or in paragraph 6 of this Order shall require the delivery of Records,
or the granting of access to Records, which may not be disclosed or provided to the Receiver due
to the privilege attaching to solicitor-client communication or due to statutory provisions
prohibiting such disclosure.
6. THIS COURT ORDERS that if any Records are stored or otherwise contained on a
computer or othez~ electronic system of infol•mation storage, whether by itldependent service
provider or otherwise, all Persons in possession or con~~•ol oC such Records shall forthwith give
unfettered access to the Receiver for the purpose of allowing the Receivet~ to recover and fully
copy all of tl~e itlformation contained Cherein whether by way of p1-inting the information onto
paper or malting copies of computer disks or• such other manner of retrieving and copying the
information as the Receiver in its discretion deems expedient, and shall not alter, erase or destroy
any Records without the prior written consent of the Receiver. further, for the purposes of this
paragraph, all Persons sha11 provide the Receiver with all such assistance in gaining immediate
access to the inloi°matioi7 in the Reeords as the Receiver may in its diset-etion require including
providing the Receiver with instructions on the use of any computer or other system and
providinb the Receiver with any and all access codes, account names and account numbers that
may he required to gain access to the information.
7. THIS COURT ORDERS that the Receiver shall provide each o.(~ the relevant landlot•ds
with notice of the Receiver's intention to remove any fixtures From any leased premises at least
se~~en (7) days pz~ior to the date of the intended removal The relevar7t landlord shall be entitled
to have a representative present in the leased premises to observe such removal and, if tl~e
landlord disputes the Receiver's entitlement to remove any such fixture udder the provisions of
the lease, such ~~ixture shall remain on the premises and shall be dealt with as ~gz~eed between airy
applicable secured cl•editors, such landlord and the Receiver, or by further Order of this Coui-t
upon application by the Receiver on at least two (2) days' notice to such landlord and any such
secured creditors.
NO PROCEEDINGS AGAINST THE RTCFIV~R
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8. TIlIS COURT ORDERS that no proceeding or ~enforceinent process in any court or
tribunal (each, a "Proceeding"), shall be commenced or continued against the Receiver except
with the written consent of the Receiver• or with leave of this Court.
NO PROC1~,rDINGS AGAINST THE DEBTOR OR THE PROP~R'TY
J. "THIS COURT ORDERS that no Proceeding against or in respect of the llebtor or the
Property shall be commenced or continued except with the writtetl consent of the Receiver or
with leave of this Court aild any and all Proceedings currently under way against or in respect oi~
the Debt.or~ or t11e Property are hereby stayed and suspended pending fLlrther Order of this Court,
provided however and for greater certainty that this stay and suspension of Proceedings does not
apply in respect of: {i} Director's Ordei• No. 8835-8J4QRU dated September 7, 2011 regarding
the Belleville Property issued by the Ministry of t11e Fnviroiv~~ent ("MOE" and now the Ministi•}~
of Environment and Climate Change, °MOECC") (fhe "MO.~ Order") pursuant to the
En>>ii~~~ni~ierttal~ P~°otection Act (Ontario} (thee "EPA") and the r~latecl proceec~ing~ b~efar~e the
r~nviroilinental Review Tribunal (the 'BRT"); and (ii) the Coi~~pclf2ies' Cf~eclitof~s ArYcnzge~azent
,4ct proceedings in respect of Nortel Networks Corporation et al. (Court file No. 09-CL-7950)
pending before fl~is Court {the "Nai-tel CCAA Pt~oceedillgs"), including, withoLlt lin7itation, as
relates to the resolution of the proofs of claim filed by the Applicai7t in the Nortel CCAA
Proceedings (the "CCAA Proofs of Claim").
NO I±.XTRCISC UI' RIGHTS OR REMEDIES
10. TI-I1S COURT QRDERS ghat all rights and i~emedics against the Debtor, the Receiver, oi•
affecting the Property, are hereby stayed and suspended except with the written consent of the
IZeceiveT• or' leave of this Court, provided however• that this stay and suspensiol~ does not apply in
respect of any "eligible financial contract" as defined in the ~BIA, and fw~ther pa-ovided that
nothing in Chis paragraph shall (i) empower the Receiver or the Debtor to carry on any business
which the Debtor' is not lawfully entitled to carry on, (ii) exempt the Receiver or the Debtot~ from
compliance with stat~itory or T•egula~ory provisions relating to health, safety or the ei7vironment,
(iii) preve~~t the filing of any registration to preserve or perfect a sectu~ity interest, (iv) prevent the
registration of a claim for lien; or (v) prevent compliance with or otherwisE restrain or have any
in~pacC o~~ the MOE Order• and airy decisions or orders by the l R~I~ and any order o1~ process in
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the Nortel CCAA Proceedings, including, without limitation, with respect to the resolution of the
CCAA Proofs of Claim.
N() INTERFERENCE WITFI THE RECLINER
1 1. THIS COURT ORDERS that no Person shall discontinue, fail t~o honour, alter, interfere
with, repudiate, terminate or cease to perform any right; renewal right, contract, agreement,
licence oz• permit iii favour of or held by the Debtor, without written consent of the Receiver or
leave of this Court.
CONTINUATION OF S~RVIC~S
12. THIS COURT ORDERS that all Persons having oral or written agreements with the
llebtor or statutory or z•egulatoly mandates for the supply of goods and/or services, i~~cluding
without limitation, all computer software, comtnunicatioi~ and other data services, centralized
l~aizkin~services~ payrol~sei•vices; insurance, transpoi-tationservic~~; utility or other services to - - ---
the Debtor- are hereby restrained until further Order of this Court 1i-om discontinuing, altering,
interfering with or terminating the supply of such goods or services as may be required by the
Receiver, and that the Receiver sha11 be entitled to the continued tike of the Debtor's currefit
telephone numbers, facsimile numbers, Internet addresses and domain names, pz~ovided in each
case that the normal prices or charges for all such goods or services z•eceived aftci- the date of this
Order are paid by the Receiver in accordance with no~~mal payment practices of the Debtor or
such other practices as may be agl•eed upon by the supplier or service pt•ovider and the Receiver,
or as nlay be ordered by this Court.
RECT;I'~'~R TO HOLD FUNDS
13. TI~IIS COURT ORDERS that all funds, monies, cheques, instrurneilts, and other• forms of
payu~ents received or collected by the Receiver from and after the making of this O7~der from any
source whatsoever, ineludiiag without liini~atioi~ t}~c sale of all or any of the Pt~operty and the
collection of any accounts receivable in whole or in part., whether in existence on tl~e date of this
Order or' 1lereafier coming into eYisfellce, shall be deposited into ol~e or- more new accounts to be
opened by the Receiver (the "Post Receivership Accounts") and the i~~onies standing to the credit
of such Post Receivership Accounts from time to time; net of az~y disbursements provided for
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1lerein, shall be held by the Receiver to be paid in accordance with the terms of this Order or' airy
further Order of this Courl.
EMPLOY~~S
1 ~. THIS COURT ORDERS that all employees of the Debtor- shall remain the employees of
the Debtor until such time as the 1Zeceiver, on the lleb~or's behalf, inay terminate the
einployn~ei7t of such employees. The Receiver shall not be liable for any employee-related
liabilities, including any successor employer liabilities as provided for in section 14.06(1.2) of
file ~31A, other ttlan such amounts as the Receiver may specifically agz~cc in writing to pay, or in
respect of its obligations under sections 81.4(5) oi• 81.6(3) of the .BIA or under the I~~age .Earner
Protection Pf~•og~am pct.
1'Il'EllA
15. 7'IIIS COURT- ORDERS that, pu~•suant to clause 7(3)(c) of the C;aiaada Per•s~nal - - --
Infor•rrzation Pr•otectinn and Electronic Documents Act, the Receiver shall disclose personal
information of identifial~ie individuals to prospective puz-chasers or bidders f'or the Property and
to their advisors, but only to the extent desirable or required to negotiate and attempt to complete
one ar more sales of the Property {each, a "Sale"). Each prospective purchaser or bidder• to
whom such personal information is disclosed shall maintain and protect the privacy oI' such
information a~ld limit the use of such information to its e~~alu~ition o~f the Sale. and if it does not
complete a Sale, shall return all such information to the Receiver, or in the alternative destroy ail
such information. The purchaser of any P~~operty shall be entitled to continue to use the personal
information provided to it, and related to the Property purchased, in a ma~l~ler which is in all
material respects identical to the prior use of such information by the Debtor, and shall return all
other personal information to the Receiver, or ensuz~e that alI other personal information is
destro}red.
LiM~IT'ATION UN ENVIRONMENTAL LIABILITIES
16. THIS COURT ORDERS that nothing herein contained shall require tl~e Receiver to
occupy or to take control, care, charge, possession or inana~ement (separately aild/or
collectively, "Possession") of any of the Property that might be environz»entally contaminated,
might be a ~olhztar~t or a contaminant, or might cause or contribute to a spill, discharge, release
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or deposit of a substance contrary to any federal, provincial or' other law respecti~lg the
protection; conservation, enhancement, remediation or rel~iabilitation of the environment or
relating to the disposal of waste or other contamiization including, without limitation, the
C_,anadian L'n~~irof2~nentul Pf•otection Act, the Ontario Fnvironr~zentcrl P~~otection Act, the Ontario
i~~ate~ Resources f1ct, ot~ the Ontario Occupc~tinnal Heall~lz anc~ Safety ~lct and regulations
there.tulder (the "E~lvironmental Legislation"), provided however that nothing herein shall
eYelnpt the Receiver from any duty to report or make disclosure imposed by applicable
E~Zvironlnental Legislation. The Receiver- shall not, as a result of this Order or' ~ziytl~ing done in
pw•suailce of the Receiver's duties and powers ulider this Order-, be deemed to be in Possessio~l of
any of t11e Property including the Belleville Property within the meaning of any Environmental
Legislation, unless it is actually in possession.
LIIVII7'A'TION ON THE RECL.IVT12'S LTABiLITY
1 7. "I~HIS CVURT OIZl~ERS t11at the Receiver• shall incur no liability oi• obligation as a result
of its appointment or the carrying out the provisions of this Order, save and except for any gross
negligence or wilful misconduct on its part, or in respect of its obligations under sections 81.4(5)
oz' 81.6(3) of the BI11 or under the Wage Ec~Yner P~~ntectiorz P3°ograf7~~ Act. Nothing in this Order
shall derogate froiil the protections afforded the Receiver by section ] 4.06 of the BIA or by any
other applicable legislation.
I2I;CEIVER'S ACCOUNTS
18. THIS COURT ORDERS that the Receiver and counsel to the Receiver' shall be paid their
reasonable fees and disbursements, in each case at their standard rates and changes, and that the
Receiver and counsel to the Receiver- shall be entitled to and al-e hel-eby g1-anted a charge (the
"IZeceivei's Charge") on the Property, as security for such fees and disbursements, both before
ar~d after the malcin~ of this Order in respect of these proceedings, amid that the Receiver's Charge
s1~a11 for~l~ a fi7~st charge on the Propez-ty in priority to all security interests, trusts, liens, charges;
mortgage of the Tirst Mortgagee and enetni7brances, statutory or otherwise, in favour of any
Person, but sLibject to sections 14.06(7), 81.4(4), and 81.6(2) of the BIA.
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19. "THIS COUR"I' ORDERS that the Receiver and its legal counsel shall pass its accounts
~ti~om tine to time, and for this purpose the accounts of the Receiver and its legal counsel are
hereby referred to a judge of the Commercial List of the Ontario Superior Court of Justice.
20. 7'I-IIS COURT ORDERS that prior to the passing of its accounts, the Receiver shall be at
liberty fz•om tulle to time to apply reasonable amounts, out of the Monies in its hands, against its
fees and disbursements, including le;al fees and disbursements, incurred at the norn7al rates and
charges of the Receiver or its counsel, and such amounts shall constitute advances against its
remunet-ation and disbursements when and as approved ley this Court.
FUNDING OF T.HL REC~IVEI2SHiP
2L THIS COtIRT ORDERS that the Receiver be at liberty and it is hereby empowered to
borrow by way of a revolving credit or otherwise, such monies ~ti•om time to time as it n ay
consider necessary or desirabie~ provided that the outstanding principal amotult does not exceed
$350,000 (or such greater amount as this Court may by further Order authorize) at any tune, at
such rate or rates of interest as it deems advisable for such period or- periods of time as it may
arrange, for• the purpose of funding the exercise of the powers and duties conferred upon the
Receiver by this Order, including interim expenditures. The whole of the ProperCy shall be and
is hereby charged by way of a fixed and specific charge (the "Receiver's Bon~owin;s Charge") as
security for the payment of the Monies borrowed, together with interest and charges thereon, ii1
priority to all security interests, trusts, liens, charges and encumbrances, statutory or otherwise,
in favour of any Person, but subordinate in priority to the Receiver's Charge and the charges as
set out in sections 14.06(7), 81.4{4), and 81.6(2) of the BIn.
22. '1,IIIS COURT ORDERS that neither the Receivel-'s Borz~owings Charge nor al~y other
security granted by the Receiver in connection with its borrowinbs urld~r this Order shall be
enforced without leave of this Court.
23. T~IIS COURT ORDERS that the Receiver is at liberty and authorized to issue certificates
substantially in the fot~m annexed as Schedule "A" hereto (tile "Receiver's Cei-tifieates") for- any
amount borrowed by it pilrsuaitt to this Order.
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24. THIS COURT ORDERS that the u7onies from time to time borrowed by the Receiver
pursuant to this Order or any further oi~dei~ of this Court and any and all Reccivei•'s Certificates
evidenciTig the same or an_y part thereof shall rank nn a perf•i pas.su basis, unless otherwise agreed
t~o by the holders of any prior issued Receiver's Certificates.
~~RV~ICL AND NOTICE
25. T~IIS COURT ORDERS that the E-Service Protocol of the Comnler•cial List (the
"1'rotocoP') is approved and adopted by reference hez•ein and, in this proceeding, the service o~~
documents made in accordance ~~~iih the Protocol (which can be found on the Commercial List
websitie at http://www.ontariocoul•ts.ca/scj/practice/practice-dir~ctior~s/toronto/e-service-
prot~ocol/) shall be valid and effective service. Subject to Rule 17.05 this Order shall constitute
an order for substituted service pursuant to Rule 16.04 of the Rules of Civil Procedure. Subject to
Rule 3.01(d) of the Rules of Civil Procedure. and paragraph 2l of the Protocol, service of
documents in accordance with the P~~otocol will be eflfective on transmission. This Court fin•ther
orders that a Case Website shall be established in accordance with the Protocol ~vitli the
following URL ̀'.
26. TI~IIS COUR"I~ OR17~RS that if the service or distribution of documents in accordance
with the Protocol is not practicable, the Receiver is at liberty to serve or distribute this Order, any
other• materials and orders in these proceedings, any notices or other' correspondence.. by
forwarding true copies thereof by prepaid ordinat•y mail, courier, personal delivery or facsimile
transmission to the Debtor's creditors or other interested parties at their respective addresses as
last shown on the records of the Debtor and that any such service or distributio~l by coiiriei•,
personal delivery or facsin7ile h•ansmission shall be deemed to be received o11 the neat busizless
day following the date of forwarding thereof, or if sent by ordinary mail, on the third business
day after inailin~.
GI~N~RAL
27. I~IIIS COl1RT ORDERS that the Receiver iYlay from tune to tinge apply to this Cou1•t for
advice and directions in the discharge of its .powers and duties hereunder.
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28. TI-I1S COURT ORDERS that nothing in this Order shall prevent the Receiver from acting
as a trustee in bankruptcy of the Debtor.
29. THIS COURT I-IEREBY REQUESTS the aid and recognition of any court, tribunal,
regulatory or administrative body having jurisdiction in Canada or in the United States to give
effect to this Order and to assist the Receiver and its agents in carrying out the terms of this
Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully
requested to make such orders and to provide such assistance to the Receiver, as an officer of this
Court, as may be necessary or desirable to give effect to this Order or to assist the Receiver and
its agents in carrying nut the terms of this Order.
30. THIS COURT ORDERS that the Receiver be at liberty and is hereby authorized and
empowered to apply to any court, tribunal, regulatory or administrative body, wherever located,
for the recognition of this Order and for assistance in carrying out the terms of this Order, and
that the Receiver is authorized and empowered to act as a representative in respect of the within
proceedings for the purpose of having these proceedings recognized in a jurisdiction outside
Canada.
31. TI1IS COURT ORDERS that the Applicant shall have its costs of this application, up to
and including entry and service of this Order, provided for by the terms of the Applicant's
security or, if not so provided by the Applicant's security, then on a substantial indemnity basis
to be paid by the Receiver from the Debtor's estate with such priority and at such time as this
Court may determine.
32. "I~HIS COURT ORDERS that any interested party may apply to this Court to vary or
amend this Order on not Iess than seven (7) days' notice to the Receiver and to any other party
likely to be affected by the order- sought or upon such other notice, if any, as this Court may
order. ---~--
ENTERED AT / iNSCRiT A TORON?0Old/BOOK N0:LE (DAMS LE flEGISTRE N0:
DEC 13 2016
1 771742v3 P~~ / PAR~~
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6. The charge securing this certificate shall operate so as to permit the Receiver to deal with
~11e Property as authorized by the Order and as authorized vy any further or other• ordet~ of the
Court.
7. The Receiver does not undertake, and it is not under any personal liability, to pay any
sum in respect of which it may issue certificates under the terms of the Order.
D~1TI~D fhe day of MONTH, 20YR.
[RECEIVER'S NAML;], solely in its capacityas Receiver of the Property, and not in itspez•sonal capacity
Per:
Name:
"1`itle:
receivership o~dcr (Dec. 13 2G16j.docx
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Sidney Street Properties Corp. and 2428049 Ontario Inc.AUUlicant Respondent Court File No. CV-16-11 ~6~-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE(COMMERCIAL LIST)
Proceedings commenced at Toronto
ORll~R(appointing Receiver)
BALDWIIV LAW ProfessionalCorporationBarristers &Solicitors~4 Victoria AvenueP.O. Box 1537Belleville, ON K8N SJ2
Ian W.Brad}~Gregory ParkerTel: 613-771-9991Fax: 613-771-9998I;n1ai1: ibrady~baldwinl~w.ca
~parker~c~;baldwinlaw.ca
Lmvyer•s for the Applicant, Sidne}- Street Prope~•tiesCorpo~•ation
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Court File No. CV-16-11565-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
B ETWEEN:SIDNEY STREET PROPERTIES CORP.
Applicant
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2428049 ONTARIO INC.
Respondent
APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCYACT, R.S.0 1985, c. B-3 AS AMENDED AND SECTION 101 OF THE COURTS OF JUSTICE
ACT, R.S.O 1990, c. C. 43, AS AMENDED
FIRST REPORT OF BDO CANADA LIMITED, IN ITS CAPACITYAS COURT APPOINTED RECEIVEROF 2428049 ONTARIO INC.
JANUARY 30, 2017
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TABLE OF CONTENTS
INTRODUCTION AND BACKGROUND .....................
I ntroduction ............................................................
Purpose of this Report ..........................................
Disclaimer................................................................
Background..............................................................
ACTIVITIES OF THE RECEIVER ...............................
PROPOSED MARKETING AND SALE PROCESS.......
ATTORNMENT OF RENTS ........................................
The Receivership Companies ...............................
Avaya Canada Corp ................................................
MANAGEMENT OF THE BELLEVILLE PROPERTY..
RECEIPTS AND DISBURSEMENTS ............................
RECEIVER'S BORROWINGS .....................................
PRIORITY PAYABLES/DEEMED TRUSTS ................
OTHER CREDITORS .................................................
PROFESSIONAL FEES AND DISBURSEMENTS.........
SUMMARY AND RECOMMENDATIONS ....................
.......................................................... 4
.......................................................... 4
.......................................................... 4
.......................................................... 5
.......................................................... 6
.......................................................... 9
........................................................ "11
........................................................ 13
........................................................ 14
........................................................16
........................................................ 17
........................................................ 21
........................................................ 21
........................................................ 22
........................................................ 23
........................................................ 24
........................................................ 25
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APPENDICES
A Receivership Order of Justice Penny dated December 13, 2016
B Sidney Street Properties Corp. Charge/Mortgage of Land
C Affidavit of Bernard D Ouellet sworn October 13, 2016
D Screen Printout of the Receiver's Case Website
E Rent Attornment Letters
F Strathcona and Fath PV Receivership Order of Justice Penny datedDecember 13, 2016
G Letter of Lipman, Zener ~ Waxman LLP dated January 23, 2017
H 2428049 Ontario Inc. Intercompany Accounts Ft Customer Detail Reports
Receiver's R&D Schedule
J Personal Property Security Act Registry Search dated December 19, 2016
K RCAP Equipment Lease
L BDO Canada Limited Fee Affidavit
M Fogter, Rubinoff LLP Fee Affidavit
CONFIDENTIAL APPENDICES
1 Summary of Listing Proposal &Copies of Listing Proposals
2 6 Month Cash Flow Forecast
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INTRODUCTION AND BACKGROUND
Introduction
1. By Order of the Honourable Justice Penny of the Ontario Superior Court of Justice
(the "Court") dated Decmeber 13, 2016 (the "Receivership Order") BDO Canada
Limited was appointed as receiver ("BDO" or the "Receiver") of the assets, properties
and undertakings of 2428049 Ontario Inc. ("242" or the "Company") pursuant to the
application of Sidney Street Properties Corp. ("Sidney" or the "Applicant"). A copy of
the Receivership Order is included hereto as Appendix A.
2. Pursuant to the Receivership Order BDO was appointed Receiver with limited
powers and duties with respect to the assets, property and undertakings of the
Company. The Receivership Order explicitly provides that 242 shall remain in possession
and control of the Belleville Property (as defined below) and that the Receiver shall not
possess, control, hold, administer and manage the Belleville Property.
Purpose of this Report
3. The purposes of this report dated January 30, 2017 (the "First Report") are to:
a) inform the Court and seek its approval of the Receiver's activities and
conduct to date, in particular with respect to the marketing and sale
process being proposed by the Receiver;
b) seek the Court's approval to list the property municipally known as 250
Sidney Street, Belleville, Ontario (the "Belleville Property")for sale with
D.W. Gould Realty Advisors Inc. ("Gould") at a list price of $3.1 million;
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c) request an order sealing Confidential Appendices 1 & 2 to this First
Report, in order to preserve the integrity of the proposed marketing and
sale process for the Belleville Property and to protect certain
commercially sensitive financial information;
d) approve the Receiver's Interim Statement of Receipts and Disbursements
(the "R&tD Schedule");
e) have this Court schedule a returnable motion date regarding the issue of
post-receivership occupation rent at the Strathcona Energy Group Inc.
("Strathcona") and Fath PV Tech Inc. ("Path PV" and together with
Strathcona referred to as the "Receivership Companies") teased
premises at the Belleville Property;
f) approve the first mortgagee, Sidney, to take over administration and
management of the Belleville Property and to have alt future
expenditures made by Sidney regarding the administration and
management of the Belleville Property funded through the issuance of
Receiver's Certificates; and
g) approve the fees and disbursements of the Receiver and its le~at counsel,
Fogter, Rubinoff LLP ("Fouler") as set out in this First Report, and
authorize the Receiver to pay all approved and unpaid fees and
disbursements.
Disclaimer
4. This First Report is prepared solely for the use of the Court, for the purpose of
assisting the Court in making a determination whether to approve: (i) the marketing and
sale process being proposed by the Receiver in respect of the Belleville Property; (ii)
management of the Belleville Property by Sidney; and (iii) other ancillary relief being
sought.
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5. Unless otherwise stated, all monetary amounts contained in this First Report are
expressed in Canadian dollars.
Background
6. 242 is an Ontario corporation. The Receiver understands that Karl Hollett is the
President, Secretary and sole director of 242. The Company's sole purpose appears to
be that of ownership of the Belleville Property.
7. The Belleville Property consists of approximately 33 acres of land with a
305,000 square foot building and ancillary buildings currently occupied by 7 tenants, of
which only 4 tenants have paid rent to the Receiver.
8. 242 has owned the Belleville Property since October 15, 2014 when it acquired
the property from Sidney and Palmer Road Properties Corp. ("Palmer") for $3.1 million.
As security for the sale of the Belleville Property, Sidney was granted by 242 a vendor-
take-back mortgage in the principal amount of $2.17 million pursuant to
Charge/Mortgage dated October 15, 2014 (the "Mortgage") that was registered against
the Belleville Property. A copy of the Mortgage is included hereto as Appendix B.
9. Given the significant environmental problems associated with the Belleville
Property, the Ministry of Environment, now the Ministry of the Environment and Climate
Change ("MOECC"), registered a Certificate of Requirement against title to the
Belleville Property pursuant to the Environmental Protection Act with respect to certain
Director's Orders and related proceedings before the Environmental Review Tribunal.
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10. The Belleville Property was originally owned by Nortel Networks Limited
("Nortet") or its corporate predecessors and has significant environmental issues
allegedly caused by the manufacturing of electrical components for the
telecommunications industry. The environmental issues associated with the Belleville
Property, and other impacted properties owned by Nortel, have been dealt with by this
Court in Nortet's proceedings under the Companies' Creditors Arrangement Act (the
"CCAA").
1 1. Sidney and Palmer filed an "Amended Proof of Loss re: Nortel Networks
Corporation" claiming an amount of approximately $34.4 to $51.4 million in relation to
alleged obligations of Nortel to Sidney regarding environmental matters at the Belleville
Property in the Nortel CCAA proceedings.
12. At Paragraphs 74 and 75 of a recent Monitor's report regarding the sanction
hearing in the Nortel CCAA proceedings, it states that approximately $155 million is
being set aside for continuing, post-sanction administrative and wind-down steps, of
which approximately $55 million relates primarily to wind-down costs and obligations
and the balance (i.e. $100 million) relates primarily to a reserve established in respect
of the continuing performance obligations of Nortel pursuant to the MOECC Orders,
including the MOECC Order on the Belleville Property.
1 3. The Monitor's Report continues to state at Paragraph 75: "This reserve amount
is being established and held without prejudice both as to whether Nortel will continue
to perform such obligations following the Plan Implementation Date as well as with
respect to the nature and quantum of Nortel's liability, if any, pursuant to the MOECC
Orders and any related Proofs of Claims, including on the basis previously agreed among
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the MOECC, Nortel and Monitor pursuant to the Agreement re: Kingston Property
Settlement and other Nortet ERT Proceedings dated February 25, 2015. For the
avoidance of doubt, no relief is sought at present with respect to Nortel's obligations
pursuant to the MOECC Orders. The Monitor expects to engage with the MOECC and
other relevant stakeholders with respect to the MOECC Orders and related Proofs of
Claim with a view to achieving full and final resolution of Nortel's environmental
obti~ations over the course of 2017."
14. The Belleville Property is also currently the subject matter of several other legal
proceedings. This receivership is generally over the real property and the limited powers
of the Receiver to sell the Belleville Property and collect rents from the tenants. The
Receivership Companies, related companies to 242 by common ownership through Kart
Hollett, are in receivership pursuant to a court application of Royal Bank of Canada
("RBC"). In addition, Business Development Bank of Canada ("BDC") has appointed a
private receiver over specific collateral or equipment owned by the Receivership
Companies that is located at the Belleville Property. Lastly, Avaya Inc., a corporate
affiliate of Avaya Canada Corp., the anchor tenant at the Belleville Property, recently
filed for bankruptcy protection in the United States pursuant to Chapter 11 of the US
Bankruptcy Code.
1 5. To complicate the multiplicity of proceedings regarding this single property are
the environmental issues facing the Belleville Property and the potential liability of any
party taking possession of the property. Past and current owners of the Belleville
Property, including Sidney as a past owner, are allegedly subject to the MOECC
Director's Order regarding the Belleville Property and the related proceedings before
the Environmental Review Tribunal.
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16. 242 is currently in default of its obligations under the Mortgage ultimately
leading to this receivership proceeding. 242 is currently indebted to Sidney in excess of
$1.82 million.
17. Further alleged background information leading up to the receivership
proceeding and outlining in further detail the altered history of environmental
contamination at the Belleville Property and the ongoing environmental work and
remediation at the Belleville Property is included in the affidavit of Bernard D. Ouellet
sworn October 13, 2016 (the "Ouellet Affidavit") attached, without exhibits, as
Appendix C.
ACTIVITIES OF THE RECEIVER
18. Pursuant to the Receivership Order the following is a summary of the more
salient activi