3 landlords among largest real estate holders in Ontario owe $144M, under bankruptcy protection: documents
3 landlords among largest real estate holders in Ontario owe $144M, under bankruptcy protection: documents
Also known as bankruptcy protection, it means any legal action taken by lenders to recoup their money has been paused so the landlords can attempt to save their business. Documents say 32 lawsuits are currently filed against the corporations in courthouses across Ontario.
The landlords and their corporations are based in the Hamilton area, but specialize in buying, renovating and in some cases relisting "distressed residential real estate in undervalued markets," said a court factum.
Where are the pitchforks? Let's go brick all their windows
Real estate investors often try to "limit liability" by creating multiple corporations.
"It's not that uncommon, but it does create this really complicated corporate structure where you have multiple companies, multiple lenders, and sometimes the links between them are hard to unravel," Fellowes said.
You don't say?
FoReIgN InVeStOrS!
This is the best summary I could come up with:
A small group of landlords who own hundreds of rental properties across the province have run out of money, owe over $144 million in unpaid loans and face dozens of lawsuits from creditors, according to documents filed with the Ontario Superior Court of Justice.
The three received court-ordered protection, under the Companies' Creditors Arrangement Act (CCAA), from over 300 lenders until the end of March 2024, wrote Justice Jessica Kimmel in her decision this week.
The landlords and their corporations are based in the Hamilton area, but specialize in buying, renovating and in some cases relisting "distressed residential real estate in undervalued markets," said a court factum.
The landlords currently own 406 properties where 1,000 tenants live, making them "one of the largest holders of residential real estate in Ontario," Kimmel wrote.
"To reduce the [landlords'] significant interest expense and improve their free cash flow, the company began exploring refinancing and sale opportunities in 2022," Clark said.
Filing for creditor protection is often used as "a very last resort" for companies on the brink of bankruptcy, said lawyer Karen Fellowes, based in Calgary and Vancouver, who specializes in restructuring and insolvency and is not involved in this case.
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Dylan Suitor, Ryan Molony and Aruba Butt are behind 11 now-insolvent corporations that face a "liquidity crisis" with only $100,000 in the bank, the documents say.
Can't be a real name