In Mann v MTM Income Trust, 2024 ABKB 161, a dispute arose over the failed Riverside Quays condominium project in Calgary, developed by the Statesman Group and Matco Investments.

Key Points:

• The project was governed by several agreements, including the Limited Partnership Agreement (LPA) and Development Management Agreement (DMA).
• Financial challenges, worsened by the 2008 recession, led to project delays and eventual defaults.
• Statesman’s CFO allegedly inflated sales numbers to secure funding for Phase 2, misleading lenders like BMO.
• A controversial “trade sales” scheme involved Statesman exchanging unsold units with contractors to falsely inflate sales figures.
• Statesman began Phase 2 construction despite Matco’s earlier decision to halt due to low pre-sales.

Court Findings:

• Statesman breached its fiduciary duties and contractual obligations, failing to act in good faith.
• The court found that the trade sales misrepresented financial health to Matco and lenders.
• Matco was entitled to damages for Statesman’s misconduct.

Damages Awarded:

Matco was awarded $1,829,954.69 plus interest?.