The Superintendent of Financial Services v. Building & Development Mortgages Canada
The Superintendent of Financial Services
Law Firm / Organization
Not Specified
Building & Development Mortgages Canada Inc.
Law Firm / Organization
Not Specified
FAAN Mortgage Administrators Inc., in its capacity as Court-appointed Trustee of Building & Development Mortgages Canada Inc.
Investors
Law Firm / Organization
Chaitons LLP
Lawyer(s)

George Benchetrit

Trustee
Law Firm / Organization
FAAN Advisors

Key Points:

  • Motion by Trustee: FAAN Mortgage Administrators Inc., the court-appointed Trustee of Building & Development Mortgages Canada Inc. (BDMC), sought court approval for:

    • The 30th and 31st Reports of the Trustee.
    • Fees and disbursements from October 16, 2022, to November 30, 2024.
    • Sealing of certain confidential exhibits.
    • Distribution of Fortress Holdback and Future Fortress Amounts to investors rather than to Fortress Real Developments Inc. or its principals.
  • Investor Losses & Recovery:

    • BDMC administered syndicated mortgage loans totaling $560 million from 11,000+ investors across 45 real estate projects.
    • The Trustee has recovered approximately $179 million, including $3.4 million since its 29th Report.
    • Investors face significant shortfalls in recoveries.
  • Distribution of Fortress Funds:

    • Given prior payments to Fortress and its principals and the investors' heavy losses, the Trustee recommended distributing remaining Fortress-related funds directly to investors.
    • The court agreed, ruling that this was equitable and appropriate.
  • Approval of Trustee's Work & Fees:

    • The court found the Trustee’s actions reasonable and consistent with its mandate.
    • Trustee and counsel fees were deemed market-appropriate and necessary.
  • Sealing Order Granted:

    • Certain confidential exhibits were sealed under Sierra Club and Sherman Estate principles to protect sensitive financial and litigation information.
  • Final Order:

    • The court approved all requests, signed the omnibus order, and ruled it effective immediately.
Superior Court of Justice - Ontario
CV-18-00596204-00CL
Corporate & commercial law
Other