The Southview Group, a cluster of property developers in Vancouver, British Columbia, faced financial turmoil, ultimately leading to the appointment of KSV Restructuring Inc. as the Receiver by the British Columbia Supreme Court. The overarching entity, Coromandel Properties Ltd., sought insolvency protection, revealing a staggering $700 million debt to various lenders.

In a complex receivership matter under the Bankruptcy and Insolvency Act (Canada), Dentons acted as counsel for Cenyard Pacific Developments Ltd., the second-ranking secured creditor in the insolvency proceedings of the Southview Group.

To navigate the intricate indebtedness owed by Coromandel Properties, the parties opted to address each project separately. The focus centred on a highly leveraged seven-acre property in Vancouver, with three major secured creditors: Peakhill, the first-ranking secured creditor; Cenyard, the second-ranking secured creditor; and Woodbourne, the third-ranking secured creditor.

The Receiver orchestrated a sales process for the Property, attracting a purchaser that could fully satisfy the first-ranking secured creditor but left Cenyard facing a shortfall. Dentons proposed a novel Reverse Vesting Order (RVO) transaction structure to the Receiver, aiming to circumvent provincial property transfer taxes. The Receiver, deeming the structure too unprecedented, deferred to Dentons to advocate for the RVO, which promised approximately $3 million in tax savings, enhancing Cenyard's recoveries.

The Province of British Columbia opposed the deal, anticipating potential tax revenue. Despite the absence of a reported Canadian court decision on granting an RVO solely for tax benefits, the British Columbia Supreme Court, in a ground-breaking move, approved the RVO. The court acknowledged the uniqueness of the case but was swayed by Dentons' arguments, asserting jurisdiction and deeming the order appropriate under the circumstances. The decision awaits a potential appeal, as of 2024, with the Province retaining a statutory right to challenge this precedent-setting ruling.