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Originally Posted by Williamoforange
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Ashcroft Homes defaults on $6.5M loan; three properties in receivership
Ashcroft's chief financial officer said the receivership involved "one lender that has taken action toward a particular property," and did not affect the much-larger Ashcroft group of companies.
Andrew Duffy, Ottawa Citizen
Published Jun 20, 2024 • Last updated 16 hours ago • 3 minute read
Ashcroft Homes has defaulted on a $6.5-million loan, sending three of its Richmond Road condominium properties into receivership.
Tenants of the three properties were issued letters earlier this week indicating that their landlord had gone into receivership. The letter, from the receiver BDO Canada Ltd., came with a court order attached.
That order, issued by Ontario Superior Court Justice Calum MacLeod, gave the receiver the power to take over management of the properties on June 17. The order applies to 101 Richmond Rd., 108 Richmond Rd. and 111 Richmond Rd., all owned by units of the Ashcroft group of companies.
Manny DiFilippo, Ashcroft’s chief financial officer, said the receivership involved “one lender that has taken action toward a particular property,” and did not affect the much-larger Ashcroft group of companies.
“It is a single lender relating to a single asset in a large portfolio of assets owned by Ashcroft,” DiFilippo said. “One never wants to be in a position of a loan going into receivership, but it is ring-fenced for that particular loan — and I think that’s the most I can say about it.”
Court documents show that Ashcroft Homes failed to repay a $6.53-million loan to Duca Financial Services when the loan matured in November 2023.
The two parties subsequently entered a “forbearance agreement,” the terms of which allowed Duca Financial to appoint a receiver if the loan remained unpaid when the deal expired.
In May, lawyers for Duca Financial argued that their client had been “more than patient” with Ashcroft and asked for an immediate receivership order.
Lawyers for Ashcroft told MacLeod that the firm had a commitment in place for $7 million in new financing, but needed several more weeks to finalize the deal.
MacLeod granted the receivership order, but issued a 30-day stay on its execution to give Ashcroft time to secure new financing.
The deadline for new financing expired on June 17 without a deal, and BDO Canada was appointed as official receiver. It took possession of the Richmond Road properties the same day.
A receivership is a legal remedy available to secured creditors to recover outstanding loans when a company defaults on its payments.
The court’s receivership order specifically excludes another Ashcroft Homes-owned property at 114 Richmond Rd.: the 19th century convent that was the subject of a years-long debate about its proposed redevelopment. A cloistered order of nuns, Les Soeurs de la Visitation, previously owned the convent, the original portions of which were built in the 1860s.
DiFilippo said the redevelopment plan for the convent was still being hammered out.
Earlier this month, Ashcroft made headlines when it was revealed the company was suing the City of Ottawa for $30 million for failing to build stormwater sewers in its new Eastboro development in Orléans.
Buyers have been waiting more than a year to move into completed homes in the development as Ashcroft and the city have fought over who should pay for the sewers.
In a statement of claim filed in May, Ashcroft asked for a court order directing the city to build the sewers as well as $30 million in damages for “breach of contract, unjust enrichment, negligent misrepresentation and/or bad faith.”
Since 1992, Ashcroft has built thousands of homes and condos in and around Ottawa. Its projects include planned communities such as Central Park at the Experimental Farm and townhome neighbourhoods such as Manhattan Square at Bells Corners.
https://ottawacitizen.com/news/local...s-receivership
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