It’s been nearly a month and a half since the Ontario courts granted a receivership order implicating a portion of the Ottawa Train Yards, one of the largest shopping malls in the city, amid allegations that the owner of the retail site was owing more than $40M to Manulife.
But it seems that things have taken an atypical turn, as far as receiverships are concerned. Court filings from July 12 reveal that control of the property at 100, 140, and 150 Trainyards Drive, 515 and 525 Industrial Avenue, and 500 and 550 Terminal Avenue has been handed back to the site owner, identified in the documents as 1414614 Ontario Inc.
Meanwhile, Controlex Corporation is identified in the court filings as the current property manager of the Ottawa Train Yards property, and it would appear that Susan Dent is at the helm of Controlex, as well as the principal of 1414614 Ontario.
At the time pleas for receivership were made back in March, Manulife Director of Commercial Mortgages James Scarrow went on record to describe the initial loan of $45.5M, which was extended on December 27, 2018 to the debtor. As security, the debtor extended the aforementioned 23.2-acre property at Trainyards Drive, Industrial Avenue, and Terminal Avenue, which consists of the Ottawa Train Yards and multiple free-standing and tenanted buildings.
Scarrow’s affidavit goes on to say that around $39,461,073 remained outstanding under the loan as of March 21. That figure was exclusive of legal fees and subject to accruing interest at a rate of around $3,651 per day. He also alleged at the time that the debtor had been “non-regarding the obligation to repay the loan both before and after the maturity date,” and that the debtor had “not engaged in any constructive communication with Manulife regarding its obligation to repay the load.”
Heeding Scarrow’s statement, an order was granted by the courts on June 4, appointing Grant Thornton Limited as receiver and manager over debtor and its property. The receiver began exercising its role as receiver on June 19.
Receivership ‘No Longer Needed’
It wasn’t long after Grant Thornton began its due diligence as receiver that the proceedings began to take a positive turn. A July 3 report from the receiver explains that after the receivership went into effect, a meeting was arranged at the Controlex offices to review the appointment order with all parties involved on June 20. During that meeting, the debtor’s principal implored Grant Thornton to hold off on exercising its duties as receiver, advising that they “had the intention of repaying, in full” the debt owed to Manulife.
By June 25, the receiver was advised that the debtor was “ready and willing to provide a payment to settle the arrears,” and funds were wired thereafter based on a June 30 draft payout statement. “However such funds were subsequently turned over to the receiver so that the receiver could seek court approval of the full amount required to satisfy the applicant’s claim, including the applicant’s enforcement costs,” July 3 document states.
After ascertaining that the full amount of indebtedness was $40,035,499, Grant Thornton issued a supplementary report on July 8 saying that they are “generally satisfied that the debtor’s creditors are being paid in the normal course and that there is no longer a need for these receivership proceedings to continue.”
Later in the report, they indicate that they had “commenced the process to transition control of the debtor’s operations back to Controlex,” with the transition of control anticipated to be completed by July 12.
STOREYS has reached out to Controlex for comment, but did not hear back by the time of publication. However, Controlex told CTV News Ottawa on Friday that they are “well capitalized” and “able to promptly exit a recent brief period of financial receivership caused by an inadvertent missed payment using available cash on hand.”