Background:
- Central 1 Credit Union (Applicant) is seeking a court-appointed receiver for 2139770 Ontario Inc. (Respondent) due to defaults under a loan agreement.
- The Respondent operates a retirement home and owes an outstanding balance of $38.2 million.
- The parties previously signed a Forbearance Agreement in September 2024 to delay enforcement until June 2025, conditional on certain compliance terms.
Forbearance Agreement Terms:
- Additional collateral from two projects.
- Monthly monitoring fees, increased interest rate, and specific deadlines for financial documentation.
Defaults and Issues:
- Respondent failed to meet deadlines for underwriting documents and property appraisal.
- Central 1 argues these breaches justify appointing a receiver, claiming lost confidence in the Respondent’s management.
Court Ruling:
- The court granted the Respondent a brief extension with specific conditions:
- Submission of missing documents by November 12, 2024.
- Registration of property severance by November 30, 2024.
- If conditions aren’t met, a receiver will be appointed without the authority to assign bankruptcy.
Conclusion:
The Respondent may continue under the Forbearance Agreement if compliance improves, but a receivership will be ordered for further breaches. BDO Canada Limited is approved as the Receiver despite minor objections.
No monetary award specified.
