UPDATES RELATED TO BUILDING & DEVELOPMENT MORTGAGES CANADA INC. ("BDMC")

Below are links to items that may be of interest to viewers:

Links to charts that summarize the key terms of the various syndicated mortgage loans administered by BDMC including, among other things, the capital stack and the status of each of the projects as at the dates noted:

Project Status Summary (as at May 3, 2019)
Links to questions frequently posed to the Trustee regarding its mandate and BDMC:
Frequently Asked Questions - July 17, 2018
Frequently Asked Questions - April 25, 2018

COURT MATERIALS RELATED TO BDMC

On April 20, 2018, pursuant to an order of the Ontario Superior Court of Justice (Commercial List) (“Appointment Order”), FAAN Mortgage Administrators Inc. (“FAAN Mortgage”) was appointed as trustee (“Trustee”) over all of the assets, undertakings and properties of Building & Development Mortgages Canada Inc. (”BDMC”) under section 37 of the Mortgage Brokerages, Lenders and Administrators Act, 2006, as amended, and section 101 of the Courts of Justice Act, as amended.

For clarity, the Trustee is not appointed over any of the projects with syndicated mortgage loans not administered by BDMC.

Appointment Order dated April 20, 2018
Application Record returnable April 20, 2018
Book of Authorities dated April 19, 2018
Factum of the Applicant dated April 19, 2018

On June 26, 2018, the Court issued an order (“Interim Stabilization Order”), which, among other things:

  • Clarified and confirmed the Trustee’s rights and responsibilities under the Appointment Order in respect of certain funds held by the Trustee that are subject to a Court-ordered priority charge and put temporary restrictions on the Trustee’s rights with respect to those funds during the stabilization period; and
  • Appointed Chaitons LLP as representative counsel to represent Investors in these proceedings.

A copy of the Interim Stabilization Order and the materials filed in connection with that order, including the Trustee’s first report to Court dated June 19, 2018 (“First Report”), is available below.

Trustee's First Report dated June 19, 2018
Endorsement re Stabilization Order dated June 26, 2018
Order re Interim Stabilization Measures and Representative Counsel Appointment dated June 26, 2018
Motion Record of the Trustee returnable June 26, 2018

On October 23, 2018, the Trustee served materials in connection with its motion returnable October 30, 2018, which provides, among other things, an update on developments in these proceedings since the First Report, including:

  • The in-depth project analyses being undertaken by the Trustee;
  • Projects subject to significant developments, including enforcement proceedings and negotiations for early payouts; and
  • The Trustee’s recommendation regarding certain of the funds maintained by the Trustee currently or received in the future, including (i) directing the Trustee to distribute certain of the funds and (ii) authorizing the Trustee to use the remaining amounts to fund the costs of required Trustee activities associated with the administration of the estate, subject to a fair and equitable allocation of such costs at a future date.

Copies of the materials filed on October 23, 2018, including the Trustee’s Second Report, are available below.

Trustee's Second Report dated October 23, 2018
Motion Record of the Trustee dated October 23, 2018

On October 30, 2018 the Court issued an order (“Realized Property Order”), which, among other things:

  • Directs the Trustee to distribute certain of the funds;
  • Authorizes the Trustee to use the remaining amounts to fund the cost of required Trustee activities associated with the administration of the estate; and
  • Requires that the Trustee report to Court no later than April 30, 2019 regarding the required Trustee activities undertaken following the date of the Realized Property Order.

A copy of the Realized Property Order is available below.

Realized Property Order dated October 30, 2018
Endorsement Re: Realized Property Order dated October 30, 2018

On November 19, 2018, the Trustee served materials in connection with its motion returnable November 28, 2018, which provides , among other things:

  • A recommendation that the Court grant an order approving a settlement offer made by the Baestone borrower in respect of the Braestone loan advanced by BDMC;
  • A recommendation for certain amendments to the Realized Property Order requiring the Trustee to make a further distribution of Realized Property to all syndicated mortgage loans entitled to such Realized Property following the closing of the Braestone settlement; and
  • Information regarding the Trustee’s and its legal counsel’s fees and disbursements from the date of the Appointment Order through to September 30, 2018 (“Period”).  The Trustee is also seeking the Court’s approval of the First Report, Second Report, the Third Report, the activities described in each of the Reports, and the professional fees of the Trustee and its legal counsel for the Period.

Copies of the materials filed on November 19, 2018, including the Trustee’s Third Report, are available below.

Trustee's Third Report dated November 19, 2018
Motion Record of FAAN Mortgage Administators Inc. dated November 19, 2018

On November 28, 2018 the Court issued an order (“Braestone Settlement Approval Order”), which, among other things:

  • Approved a settlement offer made by the Baestone borrower in respect of the Braestone loan advanced by BDMC;
  • Directs the Trustee to make a further distribution of Realized Property to all syndicated mortgage loans entitled to such Realized Property following the closing of the Braestone settlement, and to distribute 80% of Realized Property going forward; and
  • Approved the activities of the Trustee set out in the First Report, Second Report, Third Report and approved the fees and disbursements of the Trustee and its legal counsel from the date of the Appointment Order through to September 30, 2018.
Issued and Entered Braestone Settlement Approval Order dated November 28, 2018
Endorsement of Hainey J. dated November 28, 2018

On December 13, 2018, the Trustee served materials in connection with its motion returnable December 20, 2018, which provides, among other things:

  • A recommendation that the Court grant an order approving a settlement offer made by the Harlowe borrower in respect of the Harlowe loan advanced by BDMC; and
  • A recommendation for certain amendments to the Realized Property Order requiring the Trustee to make a further distribution of Realized Property to all syndicated mortgage loans entitled to such Realized Property following the closing of the Harlowe settlement; and

Copies of the materials filed on December 13, 2018, including the Trustee’s Fourth Report, are available below.

Trustee's Fourth Report dated December 13, 2018
Motion Record of FAAN Mortgage Administators Inc. dated December 13, 2018

On December 20, 2018 the Court issued an order (“Harlowe Settlement Approval Order”), which among other things:

  • Approved a settlement offer made by the Harlowe borrower in respect of the Harlowe loan advanced by BDMC; and
  • Directs the Trustee to make a further distribution of Realized Property to all syndicated mortgage loans entitled to such Realized Property following the closing of the Harlowe settlement, and to distribute 85% of Realized Property going forward.

A copy of the Harlowe Settlement Approval Order is available below.

Harlowe Settlement Approval Order dated December 20, 2018

On January 23, 2019, the Trustee served materials in connection with its motion returnable January 29, 2019, which provides, among other things:

  • A recommendation that the Court grant an order approving a settlement offer made by the Speers borrower in respect of the Speers loan advanced by BDMC.

Copies of the materials filed on January 23, 2019, including the Trustee’s Fifth Report, are available below.

Trustee's Fifth Report dated January 23, 2019
Motion Record of FAAN Mortgage Administrators Inc. dated January 23, 2019

On January 29, 2019, the Court issued an order (“Speers Settlement Approval Order”), which among other things:

  • Approved a settlement offer made by the Speers borrower in respect of the Speers loan advanced by BDMC.

A copy of the Speers Settlement Approval Order is available below.

Speers Settlement Approval Order dated January 29, 2019

On April 18, 2019, the Trustee served materials in connection with its motion returnable April 26, 2019, which provides, among other things:

  • A recommendation that the Court grant an order approving a settlement offer made by the James borrower in respect of the James loan advanced by BDMC.

Copies of the materials filed on April 18, 2019, including the Trustee’s Sixth Report, are available below.

Trustee's Sixth Report dated April 18, 2019
Motion Record of FAAN Mortgage Administrators Inc. dated April 18, 2019

On April 26, 2019 the Court issued an order (“James Settlement Approval Order”), which, among other things:

  • Approved a settlement offer made by the James borrower in respect of the James loan advanced by BDMC;

A copy of the James Settlement Approval Order is available below.

Issued and Entered James Settlement Approval Order dated April 26, 2019
Endorsement of Hainey J. dated April 26, 2019

On May 10, 2019, the Trustee served materials in connection with its motion returnable May 23, 2019, which provides, among other things, a comprehensive update on developments in these proceedings since the Second Report.  In addition to providing updates on projects subject to significant developments, including enforcement proceedings, postponements and other significant events, the Seventh Report was filed in support of the Trustee’s request for a Court order, among other things:

  • approving the Trustee transaction process, as described in detail in the Seventh Report, which seeks to standardize the process for the negotiation of all refinancing, sale, payout and other restructuring proposals involving any consideration being provided to Fortress Real Developments Inc. (“Fortress”), its principals or any related party to Fortress;
  • directing the Trustee to distribute $372,650 to the Original Victoria Medical Investors and $301,086 to the Hybrid Victoria Medical Investors to equalize payments previously made to Victoria Medical Investors;
  • approving the execution of a Bayview Direction, related to a project administered by Derek Sorrenti (“Sorrenti”); the borrower requires a direction to pay be executed by BDMC before it will distribute funds to Sorrenti, because BDMC remains the named lender that is a party to the loan agreement (although Sorrenti has been and continues to be the administrator);
  • compelling the production of documents, records and information related to certain projects transferred by Sorrenti to BDMC and to otherwise comply with the Appointment Order;
  • compelling production of information by the borrower on the Treehouse Project and the borrower on the Lake and East Project, respectively, sufficient to satisfy their respective reporting obligations to the Trustee and to otherwise comply with the terms of the Appointment Order; and
  • approving the Trustee’s Fourth Report, Fifth Report, Sixth Report and Seventh Report, as well as the Trustee’s activities, fees and disbursements, including the fees and disbursements of its counsel, for the period from October 1, 2018 to March 31, 2019.

Copies of the materials filed on May 10, 2019, including the Trustee’s Seventh Report, are available below.

Trustee's Seventh Report dated May 10, 2019
Motion Record of FAAN Mortgage Administrators Inc. dated May 10, 2019

On May 17, 2019, the Trustee served materials in connection with its motion returnable May 23, 2019, which provides, among other things:

  • A recommendation that the Court grant an order approving a settlement offer made by the Crestview borrower in respect of the Crestview loan advanced by BDMC.

Copies of the materials filed on May 17, 2019, including the Trustee’s Eighth Report, are available below.

Trustee's Eighth Report dated May17, 2019
Motion Record of FAAN Mortgage Administrators Inc. dated May17, 2019

On May 23, 2019 the Court issued an order (“Crestview Settlement Approval Order”), which, among other things:

  • Approved a settlement offer made by the Crestview borrower in respect of the Crestview loan advanced by BDMC;

A copy of the Crestview Settlement Approval Order is available below.

Issued and Entered Crestview Settlement Approval Order dated May 23, 2019
Endorsement of Hainey J. dated May 23, 2019

On May 23, 2019, the Court granted an order (“Omnibus Order”):

  • approving the Trustee transaction process, as described in detail in the Seventh Report;
  • directing the Trustee to distribute $372,650 to the Original Victoria Medical Investors and $301,086 to the Hybrid Victoria Medical Investors to equalize payments previously made to Victoria Medical Investors;
  • approving the execution of a Bayview Direction, related to a project administered by Derek Sorrenti (“Sorrenti”);
  • compelling the production of documents, records and information related to certain projects transferred by Sorrenti to BDMC and to otherwise comply with the Appointment Order;
  • compelling production of information by the borrower on the Treehouse Project and the borrower on the Lake and East Project, respectively, sufficient to satisfy their respective reporting obligations to the Trustee and to otherwise comply with the terms of the Appointment Order; and
  • approving the Trustee’s Fourth Report, Fifth Report, Sixth Report and Seventh Report, as well as the Trustee’s activities, fees and disbursements, including the fees and disbursements of its counsel, for the period from October 1, 2018 to March 31, 2019.

The Court also granted a further order (“Land Registry Direction Order”) allowing the Trustee to remove orders previously registered on title of certain properties, subject to the Trustee filing the appropriate Trustee’s certificates.

A copy of the Omnibus Order and the Land Registry Direction Order as well as the related endorsement is provided below.

Issued and Entered Omnibus Order dated May 23, 2019
Issued and Entered Land Registry Office Direction Order dated May 23, 2019
Endorsement of Hainey J. dated May 23, 2019

On July 30, 2019, the Trustee served materials in connection with its motion to approve the proposed distribution to the syndicated mortgage lenders to the Charlotte-Adelaide (“CHAT”) project in accordance with:

  • the terms of the inter-lender agreement entered into in respect of the loan agreements that govern the CHAT Loan and the LH1 Loan (as defined in the Trustee’s Ninth Report below); or
  • as the Court may otherwise direct.

A hearing on this matter has been scheduled for October 16, 2019.

Copies of the materials filed on July 30, 2019, including the Trustee’s Ninth Report, are available below.

Trustee's Ninth Report dated July 30, 2019
Motion Record of FAAN Mortgage Administrators Inc. dated July 30, 2019
Endorsement of Hainey J. dated July 30, 2019

Further Court materials will be filed by the relevant parties prior to the Court hearing. These materials will be made available in the section below titled “OTHER ITEMS RELATED TO BDMC – RE CHARLOTTE-ADELAIDE PROJECT.”

On September 4, 2019, the Trustee served materials in connection with its motion returnable September 11, 2019, which provides, among other things:

  • A recommendation that the Court grant an order approving a settlement offer made by the Humberstone borrower in respect of the Humberstone loan advanced by BDMC.

Copies of the materials filed on September 4, 2019, including the Trustee’s Tenth Report, are available below.

Trustee's Tenth Report dated September 4, 2019
Motion Record of FAAN Mortgage Administrators Inc. dated September 4, 2019
Endorsement of Hainey J. dated May 23, 2019

On September 11, 2019 the Court issued an order (“Humberstone Settlement Approval Order”), which, among other things:

  • Approved a settlement offer made by the Humberstone borrower in respect of the Humberstone loan advanced by BDMC;

A copy of the Humberstone Settlement Approval Order is available below.

Issued and Entered Humberview Settlement Approval Order dated September 11, 2019
Endorsement of Hainey J. dated September 11, 2019

Other Items related to BDMC - re Brookdale Project

re BROOKDALE - Report of the Receiver dated October 2, 2018
re BROOKDALE - Application Record of Firm Capital Mortgage Fund Inc. for the Motion returnable October 18, 2018
re BROOKDALE - Issued Notice of Application of Firm Capital returnable October 18, 2018

Other Items related to BDMC - re Charlotte-Adelaide Project

Affidavit of Mardiros Gerard Panossian sworn 2019-08-15
Affidavit of Annette Reid sworn 2019-08-15
Affidavit of Mark Wells sworn 2019-08-23
Supplementary Affidavit of Mark Wells sworn 2019-08-23

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