Bison Properties Ltd. (Re)

Bison Properties Ltd. (Re)

The Court held the Receiver had jurisdiction under the Receivership Order and the SISP Order to sell the Hotel and Property to the Rev/Metro-Can purchasers; the sale was commercially reasonable and the product of an adequate marketing process; to protect the Purchasing Bondholders' asserted REDMA proprietary claims the full amount of their claimed interest ($18.121 million) must be retained as substitute trust property by the Receiver pending adjudication; occupants of three Residences will be offered amended early occupancy agreements with ROFRs (with special 12-month protection for Ms. Asser) and other terms; applications to adjourn and for summary determination by Purchasing...

Citation
2016 BCSC 793
Parties
Debtor/respondent (subject of Receivership): Bison Properties Ltd.; Receiver: Ernst & Young; Applicant Lender / Proposed Purchaser (co Purchaser): Metro-Can Construction Ltd.; Applicant Lender / Proposed Purchaser (co Purchaser): REV Investments Ltd.; Applicant Lender (first Priority Construction Lender): John & Bonnie Buhler Foundation; Claimants / Opponents Asserting REDMA Constructive Trust: Purchasing Bondholders; Related Entity / Subject of Receivership: Walker Hospitality Ltd.; Principal of Bison and WHL / Subject of Receivership: Kevin Bruce Walker; Former Solicitor Implicated in Faskens Litigation: Fasken Martineau DuMoulin LLP; Proposed New Lender to Finance Purchase: Timbercreek Mortgage Investment Corporation
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
3 May 2016
Procedural Posture
Bankruptcy and Insolvency – Receivership; Application for Approval of Sale and Related Relief / Hearing on Approval of Receiver's Proposed Sale; Interlocutory Judgment Approving Sale With Conditions and Ancillary Orders
Outcome
Receiver's proposed sale to Rev/Metro-Can (Rev Offer) approved with conditions and amendments; full amount of Purchasing Bondholders' asserted REDMA claim to be retained as substitute trust property; other relief granted and denied as set out below
Legal Topics
Receivership, Sale Approval and Vesting Order, Real Estate Development Marketing Act (redma) Trust Claims, Constructive/tracing Trusts, Priority of Security Interests, Occupancy Agreements and Rights of First Refusal, Release of Receiver and Approval of Fees, Summary Determination Vs. Full Trial
Source Language
English
Bankruptcy and Insolvency Real Property Trusts and Equity Civil Procedure Receivership Sale Approval and Vesting Order Real Estate Development Marketing Act (redma) Trust Claims Constructive/tracing Trusts +4 more

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Parties

Bison Properties Ltd.

Debtor/respondent (subject of Receivership)

Ernst & Young

Receiver

Metro-Can Construction Ltd.

Applicant Lender / Proposed Purchaser (co Purchaser)

REV Investments Ltd.

Applicant Lender / Proposed Purchaser (co Purchaser)

John & Bonnie Buhler Foundation

Applicant Lender (first Priority Construction Lender)

Purchasing Bondholders

Claimants / Opponents Asserting REDMA Constructive Trust

Walker Hospitality Ltd.

Related Entity / Subject of Receivership

Kevin Bruce Walker

Principal of Bison and WHL / Subject of Receivership

Fasken Martineau DuMoulin LLP

Former Solicitor Implicated in Faskens Litigation

Timbercreek Mortgage Investment Corporation

Proposed New Lender to Finance Purchase

Procedural Posture

Bankruptcy and Insolvency – Receivership; Application for Approval of Sale and Related Relief / Hearing on Approval of Receiver's Proposed Sale; Interlocutory Judgment Approving Sale With Conditions and Ancillary Orders

Legal Issues

  1. 1 Does the receiver have jurisdiction under the receivership and SISP orders to sell the property in the manner proposed?
  2. 2 Whether the Purchasing Bondholders have a REDMA-based proprietary trust claim that must be protected prior to sale or by substitute trust property
  3. 3 What amount (if any) of sale proceeds must be held in trust pending resolution of the REDMA claim?

Ratio Decidendi

The Court held the Receiver had jurisdiction under the Receivership Order and the SISP Order to sell the Hotel and Property to the Rev/Metro-Can purchasers; the sale was commercially reasonable and the product of an adequate marketing process; to protect the Purchasing Bondholders' asserted REDMA proprietary claims the full amount of their claimed interest ($18.121 million) must be retained as substitute trust property by the Receiver pending adjudication; occupants of three Residences will be offered amended early occupancy agreements with ROFRs (with special 12-month protection for Ms. Asser) and other terms; applications to adjourn and for summary determination by Purchasing...

Court Disposition

Receiver's proposed sale to Rev/Metro-Can (Rev Offer) approved with conditions and amendments; full amount of Purchasing Bondholders' asserted REDMA claim to be retained as substitute trust property; other relief granted and denied as set out below

Orders

  • Approve sale to purchasers (NOAH, 1067100 B.C. Ltd., OB Hotels LP as structured in Rev Offer) subject to amendments ordered by the Court and the terms in these Reasons
  • On closing retain and hold in trust $18,121,000 (the Purchasing Bondholders' claimed REDMA amount) with the Receiver as substitute trust property pending adjudication of the REDMA Trust claim