UPDATES RELATED TO SORRENTI LAW PROFESSIONAL CORPORATION ("SORRENTI")

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

A link to a chart that summarizes the key terms of the various syndicated mortgage loans administered by Sorrenti including, among other things, the capital stack and the status of each of the projects as at the dates noted:

Project Analysis Summary (as at March 4, 2020 - Revised)

A link to questions frequently posed to the Trustee regarding its mandate and Sorrenti:

Sorrenti Frequently Asked Questions (October 1, 2019)

COURT MATERIALS RELATED TO DEREK SORRENTI OR SORRENTI LAW PROFESSIONAL CORPORATION

On March 6, 2020, the Trustee served materials in connection with its motion returnable March 17, 2020, which provides, among other things, a recommendation that the Court grant an order:

  • approving certain amendments to the interim stabilization measures of the Appointment Order to:
    • authorize the Trustee to distribute 50% of the Realized Property to the applicable Investors, including, without limitation, authorizing and directing the Trustee to effect a distribution:
      • to Bayview Individual Investors in an amount equal to 50% of the Bayview Realized Property,
      • to Gotham Investors in an amount equal to 50% of the Gotham Realized Property; and
      • to the HVS Investors in an amount equal to 50% of the HVS Realized Property; and
    • authorize the Trustee to use the retained Realized Property as an administrative holdback to fund the cost of these proceedings, including to pay operating and professional costs associated with the SML Administration Business; and
  • approving the First Report of the Trustee dated January 22, 2020 and the Second Report dated March 6, 2020, as well as the Trustee’s activities described therein, and approving the Trustee’s fees and disbursements, including the fees and disbursements of its counsel, for the period from the date of the Appointment Order to January 31, 2020; and
  • directing the applicable Land Registry Office to, upon the filing by the Trustee of one or more certificate(s) with the Court, expunge and delete the Appointment Order from title to the property(ies) identified in such certificate(s).

Copies of the materials filed on March 6, 2020, including the Trustee’s Second Report, are available below.

Trustee's Second Report dated March 6, 2020
Motion Record of FAAN Mortgage Administrators Inc. dated March 6, 2020

On April 13, 2020, the Trustee served a Supplement to the Second Report of the Trustee dated March 6, 2020 in respect of a Claim to Certain Proceeds from the Harmony Village Project by Fortress Real Developments Inc.

The Trustee’s Supplemental report is available below:

Trustee's Supplement to Second Report dated April 13, 2020

On May 5, 2020, the Court granted an order (“Omnibus Order”):

  • approving certain amendments to the interim stabilization measures of the Appointment Order to:
    • authorize the Trustee to distribute 50% of the Realized Property to the applicable Investors, including, without limitation, authorizing and directing the Trustee to effect a distribution equal to 50% of the Bayview, Gotham, and HVS Realized Property; and
    • authorize the Trustee to use the retained Realized Property as an administrative holdback to fund the cost of these proceedings, including to pay operating and professional costs associated with the SML Administration Business; and
  • approving the First Report of the Trustee dated January 22, 2020, the Second Report dated March 6, 2020, the Supplement to the Second Report dated April 13, 2020, as well as the Trustee’s activities, the Trustee’s fees and disbursements, including the fees and disbursements of its counsel, for the period from the date of the Appointment Order to January 31, 2020.

The Court also granted a further order (the “LRO Direction Order”) which directs the applicable Land Registry Office to, upon the filing by the Trustee of one or more certificate(s) with the Court, expunge and delete the Appointment Order from title to the property(ies) identified in such certificate(s).

Copies of the Omnibus Order, the LRO Direction Order, and the related endorsement are provided below.

Issued and Entered Omnibus Order dated May 5, 2020
Issued and Entered LRO Direction Order dated May 5, 2020
Endorsement of Justice Hainey dated May 5, 2020

On January 22, 2020, the Trustee served materials in connection with its motion returnable January 30, 2020, which provides, among other things, a recommendation that the Court grant an order approving a settlement offer made by the Gotham borrower in respect of the Gotham loan advanced by Sorrenti.

Copies of the materials filed on January 22, 2020, including the Trustee’s First Report, are available below.

Trustees First Report dated January 22, 2020
Motion Record of FAAN Mortgage Administrators Inc. dated January 22, 2020

On January 30, 2020, the Court granted an order approving a settlement offer made by the Gotham borrower in respect of the Gotham loan advanced by Sorrenti.

A copy of the Gotham Settlement Approval Order and the related endorsement is provided below.

Issued and Entered Gotham Settlement Approval Order dated January 30, 2020
Endorsement of Justice Hainey dated January 30, 2020

On September 30, 2019, pursuant to an order of the Ontario Superior Court of Justice (Commercial List) (the “Appointment Order”), FAAN Mortgage Administrators Inc. (“FAAN Mortgage”) was appointed as trustee (“Trustee”) over all of the assets, undertakings and properties of Derek Sorrenti or Sorrenti Law Professional Corporation (collectively, “Sorrenti”) that relate to Sorrenti’s administration of syndicated mortgage loans (“SMLs”).  FAAN’s appointment was precipitated by an application made by the Law Society of Ontario under Section 49.47 of the Law Society Act, R.S.O. 1990. c. L.8, and section 101 of the Courts of Justice Act, as amended. The materials related to the Trustee’s appointment can be accessed at the following links:

Law Society of Ontario Application Record (Part 1)
Law Society of Ontario Application Record (Part 2)
Pre-filing Report of the Proposed Trustee dated September 29, 2019
Order of Justice Hainey dated September 30, 2019