Clarkson Road Holdings Inc., Clarkson Road Developments GP Inc. and 2813427 Ontario Inc.

CCAA

^{Page last updated: December 10, 2024}

This page is for information purposes only and you should consult your professional adviser if you have any questions or are uncertain as to your rights or obligations.

Status of file as of December 11, 2024

On December 11, 2024, the Court issued the Construction DIP ARIO Amendment Order which, among other things:

1. Approved the increase in the Administration Charge from $350,000 to $400,000;
2. Approved the increase in the Construction DIP Lender’s Charge, from $3,875,000 to $5,875,000; and
3. Approved the amendments to the Construction DIP Term Sheet.

Status of file as of December 5, 2024

On December 3, 2024, the Monitor filed its Fourth Report (the “Fourth Report”) with the Court to provide the Court with information with respect to:

1. The activities of the Companies and the Monitor since the Third Report;
2. The update on the Initial Preservation Activities and the proposed Additional Preservation Activities;
3. The Companies’ cash flows and the updated construction budget;
4. The update on the Priority Dispute; and
5. The Companies’ motion for the Construction DIP ARIO Amendment Order.

Status of file as of December 2, 2024

On November 29, 2024, the Companies filed their motion with the Court for an order (the “Construction DIP ARIO Amendment Order”) to, among other things:

1. Amend the ARIO (as defined below), to: (i) increase the Administration Charge from $350,000 to $400,000; and, (ii) increase the Construction DIP Lender’s Charge, from $3,875,000 to $5,875,000; and
2. Approve amendments to the Construction DIP Term Sheet.

Status of file as of September 20, 2024

On September 20, 2024, the Court issued the Stay Extension and Second ARIO Amendments Order which, among other things,

1. Extended the Stay Period up to and including January 31, 2025;
2. Amended the ARIO to:
   1. increase the Deposit Loan and Deposit Charge, from $1,050,000 to $1,675,000;
   2. decrease the Construction DIP Lender’s Charge, from $4,500,000 to $3,875,000; and
   3. Approve amendments to the Investment Agreement to reflect the increased Deposit Loan and extend the Closing Deadline to January 31, 2025 and authorizing the Applicant Entities to enter into such amendments, nunc pro tunc; and
   4. To set the Charges as follows:
      1. First – Administration Charge (to the maximum amount of $350,000);
      2. Second – Directors’ Charge (to the maximum amount of $125,000);
      3. Third – Subordinated Administration Charge (to the maximum amount of $300,000);
      4. Fourth – Construction DIP Lender’s Charge (to the maximum amount of $3,875,000, plus interest, fees and costs);
      5. Fifth – Deposit Charge (to the maximum amount of $1,675,000, plus interest, fees and costs).

Status of file as of September 18, 2024

On September 18, 2024, the Companies filed its motion for an order (the “Second Stay Extension and ARIO Amendments Order”) to, among other things:

1. Extend the Stay Period up to and including January 31, 2025;
2. Amend the ARIO to:
   1. increase the Deposit Loan and Deposit Charge, from $1,050,000 to $1,675,000;
   2. decrease the Construction DIP Lender’s Charge, from $4,500,000 to $3,875,000; and
   3. Approve amendments to the Investment Agreement to reflect the increased Deposit Loan and extend the Closing Deadline to January 31, 2025 and authorizing the Applicant Entities to enter into such amendments, nunc pro tunc.

On the same, date, on September 18, 2024, the Monitor filed its Third Report (the “Third Report”) with the Court, to provide the Court with information concerning:

1. The activities of the Companies and the Monitor since the Second Report;
2. An update on the activities, including completion of the parking lot walls and ground level slab (the “Preservation Activities”) and a construction budget associated  with the Preservation Activities (the “Preservation Construction Budget”);
3. An update on the dispute (the “Priority Dispute”) between CS Capital and a number of construction lien holders, including Kenaiden;
4. An update on the SISP and next steps in these CCAA Proceedings;
5. The Companies’ actual cash flows for the 9-week period from July 13 to September 13, 2024 as compared to the forecast cash flows for the same period;
6. An updated cash flow forecast for the 20-week period from September 14, 2024 to January 31, 2025, prepared in connection with the Companies’ motion for the Second Stay Extension and ARIO Amendments Order (the “Motion”);
7. The Monitor’s views on the Companies’ Motion.

Status of file as of August 20, 2024

On June 11, 2024 date, a Priority Dispute was commenced between CS Capital Limited (“CS Capital”) and a number of construction lien holders, including Kenaiden Contracting Limited (“Kenaiden”) regarding the priority of the existing vendor take-back mortgage vis a vis the construction liens. The Priority Dispute was heard on July 25, 2024 by Honourable Justice Cavanagh.  

The endorsement from Honourable Justice Cavanagh was received on August 20, 2024, which dismissed the motion by CS Capital Limited and concluded that the vendor take-back mortgage does not have priority over the construction lien holders. 

The Monitor understands that all parties are considering the outcome of the decision on next steps in these CCAA Proceedings and intends to provide a further update in its next report to the Court.

Status of file as of July 29, 2024

On July 29, 2024, the Court issued the Stay Extension and ARIO Amendment Order which, among other things:

1.    Extended the Stay Period to and including September 30, 2024;

2.    Approved an Amended and Restated Investment Agreement between the Companies and the Investor, as a stalking horse bid;

3.    Amended the ARIO as follows:

a.    Amended para 32 and 33 of the ARIO to approve the increase in the Deposit Loan and Deposit Charge to $1,050,000 plus interest, fees and costs and that the Deposit Loan shall be utilized on the terms and subject to the conditions set forth in the Amended and Restated Investment Agreement between the Companies and the Investor (the “Investment Agreement”);

b.    Amended para 37 of the ARIO to approve the decrease in the Construction DIP Lender’s Charge from $5,000,000 to $4,500,000;

c.    Amended para 44 and 46 of the ARIO to set the Charges as follows:

i. First – Administration Charge (to the maximum amount of $350,000);

ii. Second – Directors’ Charge (to the maximum amount of $125,000);

iii. Third – Subordinated Administration Charge (to the maximum amount of $300,000);

iv. Fourth – Construction DIP Lender’s Charge (to the maximum amount of $4,500,000, plus interest, fees and costs);

v. Fifth – Deposit Charge (to the maximum amount of $1,050,000, plus interest, fees and costs); and

vi. that the Charges shall constitute a charge on the Property and such Charges shall rank in priority to all other security interests, trusts, deemed trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise.

Status of file as of July 24, 2024

On July 23, 2024, the Companies filed their motion with the Court for an order (the “Stay Extension and ARIO Amendment Order”) to, among other things:

1. Extend the Stay Period to and including September 30, 2024;
2. Approve an Amended and Restated Investment Agreement between the Companies and the Investor, as a stalking horse bid;
3. Amend the ARIO to:
   1. Increase the Deposit Loan and Deposit Charge from $550,000 to $1,050,000;
   2. Decrease the Construction DIP Lender’s Charge from $5,000,000 to $4,500,000; and
   3. Elevate the rank of the Construction DIP Lender’s Charge, the Subordinated Administration Charge and the Deposit Charge, ahead of the VTB Loan.

The motion will be heard on July 25, 2024.

Status of file as of June 28, 2024

In accordance with the SISP, the Monitor, in consultation with the Broker, has elected to exercise its discretion to extend the Phase 2 Bid Deadline to Friday, July 12, 2024 at 5 pm EST. For further information, please contact Taylor Clements at CBRE: (647) 943 4150 or taylor.clements@cbre.com.

Status of file as of June 17, 2024

The Phase 1 Bid Deadline of the SISP was completed on June 11, 2024. The SISP is proceeding to Phase 2 and the Phase 2 Bid Deadline is 5:00 p.m. (EST) on June 28, 2024. For further information, please contact Taylor Clements at CBRE: (647) 943 4150 or taylor.clements@cbre.com.

Status of file as of May 28, 2024

Pursuant to paragraph 6.2 (a) of the Investment Agreement, on May 27, 2024 the Investor delivered its written notice to the Companies and the Monitor waiving the Construction Partner Condition. Pursuant to the terms of the SISP, the Investment Agreement will continue to act as the “stalking horse” bid for purposes of the SISP and is deemed to be a Qualified Bid.

Status of file as of May 13, 2024

A Sales and Investor Solicitation Process (“SISP”) to be run by CBRE was approved by the Court, as well as a Stalking Horse Bid. Amongst other matters, the Court also approved a stay of proceedings until August 2, 2024.

Parties interested in obtaining more information about the opportunity to acquire this project should contact Taylor Clements at CBRE: (647) 943 4150 or taylor.clements@cbre.com

Status of file as of May 7, 2024

On May 6, 2024, the Companies filed their motion with the Court for:

1.    The ARIO to, among other things:

a. Extend the Stay Period up to and including August 2, 2024;

b. Authorize the Companies to use funds provided as a deposit under the Investment Agreement, dated May 6, 2024 (the “Investment Agreement”) between the Applicants and the Initial DIP Lender, in its capacity as Investor (the “Investor”), inclusive of the amounts previously advanced under the Initial DIP Facility to a maximum of $550,000 (the “Deposit Loan”) and authorize a charge in favour of the Investor to secure the Deposit Loan (the “Deposit Charge”);

c. Authorize the Companies to obtain and borrow under credit facilities from the Initial DIP Lender, in its capacity as the “Construction DIP Lender”, to a maximum of $5,000,000 (the “Construction DIP Facility”), and authorize a charge in favour of the Construction DIP Lender to secure the Construction DIP Facility;

d. Increase the amount of the Administration Charge from $200,000 to $350,000;

e. Grant a subordinating Administration Charge (the “Subordinated Administration Charge”) in the amount of $300,000; and

f. Increase the amount of the Directors’ Charge from $50,000 to $125,000; and

2.    The SISP Order to, among other things:

a. Approve the SISP and authorize the Companies and the Monitor to commence the SISP immediately;

b. Authorize the Monitor to negotiate the Investment Agreement;

c. Approve the Investment Agreement as a stalking horse bid in the SISP; and

d. Approve the Investor Entitlements (as defined in the Investment Agreement).

The motion will be heard on May 13, 2024. 

Status of file as at May 3, 2024

On May 3, 2024 (the “Filing Date”), Clarkson Road Holdings Inc., Clarkson Road Developments GP Inc. and 2813427 Ontario Inc. (collectively, the “Applicants”) applied for and received an order (the “Initial Order”) for protection pursuant to the Companies’ Creditors Arrangement Act R.S.C.1985, c.C-36, as amended (“CCAA Proceedings”) from the Ontario Superior Court of Justice Commercial List (the “Court”).

Any terms not defined herein, have meaning given to them in the Initial Order.

The Initial Order, among other things:

1. Declared that the Applicants, Clarkson Road Developments Limited Partnership and Eleven11 Limited Partnership (collectively with the Applicants, the "Companies") shall enjoy the benefits of the protections and authorizations provided in the Initial Order;
2. Appointed PricewaterhouseCoopers Inc., LIT (“PwC”) as monitor of the Companies (the “Monitor”);
3. Approved a stay of proceedings up to and including May 13, 2024 (“Stay Period”), which applies against the Companies or the Monitor, or the former, current or future directors or officers of the Companies and the Companies’ Property and Business;
4. Extended the Stay Period to WPAM Royal Windsor Limited Partnership, a guarantor of the secured debt of the Applicants, and its general partner WPAM Royal Windsor GP Inc. (collectively, the “Stay Parties”);
5. Granted a first ranking charge, in the amount of $200,000 (the “Administration Charge”), on the Property of the Companies, as security for the professional fees and disbursements of the Monitor, the Monitor’s counsel and the Companies’ counsel, which charge shall rank in priority to all other security interests, trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise;
6. Granted a second ranking charge, in the amount of $50,000 (the “Directors’ Charge”), on the Property of the Companies, as security for the indemnity granted to the Companies’ directors and officers, which charge shall rank in priority to all other security interests, trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise; and
7. Authorized the Companies to borrow under the Initial DIP Agreement from 1000861289 Ontario Inc. (“Initial DIP Lender") in order to finance the Companies’ working capital requirements and other general corporate purposes and capital expenditures, provided that borrowings under such credit facility shall not exceed $100,000 (the “Initial DIP Facility”), unless permitted by further order of this Court; and
8. Granted a third ranking charge in favour of the Initial DIP Lender over the Property of the Companies, however behind the charge of VTB Loan, to a maximum amount of $100,000, as security for the DIP Facility (the “Initial DIP Lender’s Charge”, and collectively with the Administration Charge, the Directors’ Charge, the “Charges”).

In accordance with section 23 (1)(ii)(b) of the CCAA and the Initial Order, on May 7, 2024, a notice of the CCAA Proceedings (the “Notice”) was sent to all known creditors of the Companies who are owed $1,000 or more. A copy of the Notice may be found on the Notices and List of Creditors subpage of this website.

On May 10, 2024 (the “Comeback Date”), the Companies intend to return to Court to seek:

1.  an Amended and Restated Initial Order (“ARIO”) among other things, amending the Charges as necessary and extending the Stay Period; an
2. a SISP Order, among other things, approving the sale and investment solicitation process (the “SISP”) and a stalking horse bid.