Court appoints replacement Trustee over corporations performing mortgage administration functions for Tier 1-related development projects
October 31, 2016
The Ontario Superior Court of Justice (Commercial List) granted the Superintendent of Financial Services’ application for a court-appointed officer to protect the interests of syndicated mortgage investors in certain real estate development projects.
The Court appointed Grant Thornton Limited as Trustee over 11 corporations that were previously performing mortgage administration functions on behalf of syndicated mortgage investors in Tier 1 real estate development projects. The Trustee’s role is to act in the best interests of the investors. The Trustee has been empowered to, amongst other things:
(i) administer scheduled mortgage payments received from developers;
(ii) take steps to address mortgage defaults; and
(iii) review any requests to subordinate the mortgages in favour of construction financing.
The Trustee’s mandate does not extend to the developers of the Tier 1 projects.
The Trustee will be contacting investors to advise them of its appointment, and will post all materials filed in respect of these proceedings on its website at www.grantthornton.ca/tier1
. The website will also include periodic updates to investors, as material matters unfold.
The Trustee’s appointment follows enforcement actions taken by the Financial Services Commission of Ontario (FSCO) against Tier 1 Transaction Advisory Services Inc., Tier 1 Mortgage Corporation and First Commonwealth Mortgage Corporation, as well as three related individuals, for practices that contravene the Mortgage Brokerages, Lenders and Administrators Act, 2006, arising in certain Tier 1 syndicated mortgage transactions.
List of related projects
FSCO is aware of 16 development projects located in Ontario that are impacted by the Trustee’s appointment:
- 445 Princess Street (student residences; Kingston)
- 525 Princess Street (student residences; Kingston)
- 555 Princess Street (student residences; Kingston)
- 1234 Richmond Street (student residences; London)
- 2168 Ghent Avenue (Alzheimer’s/dementia care facility; Burlington)
- 105 Garden Drive (Alzheimer’s/dementia care facility; Burlington)
- 169 Bordon Avenue North (Alzheimer’s/dementia care facility; Kitchener)
- Silver Seven (Silver Screen commercial building; Ottawa)
- 774 Bronson Avenue (student residences; Ottawa)
- Legacy Lane (townhomes; Huntsville)
- Guildwood (waterfront condominiums, Kingston Road; Scarborough)
- Vaughan Crossings (medical office building, Dufferin Street and Centre Street; Vaughan)
- 1614 Charles Street (harbourfront condominiums; Whitby)
- 28 McMurray Street (lofts/condominiums, Bracebridge)
- Keele Medical (medical office building; Toronto)
- Highlights Mississauga Condominium and Towns (Mississauga)
- Read the interim compliance order against Tier 1 Transaction Advisory Services Inc.
- Read the interim suspension order against Tier 1 Mortgage Corporation, First Commonwealth Mortgage Corporation, Bhaktraj Singh, Jude Cassimy and Dave Balkissoon
FSCO's legislative mandate is to provide regulatory services that protect the public interest and enhance public confidence in the sectors it regulates. FSCO regulates the insurance sector; pension plans; loan and trust companies; credit unions and caisses populaires; the mortgage brokering sector; co-operative corporations in Ontario; and service providers who invoice auto insurers for statutory accident benefits claims. FSCO is accountable to the Minister of Finance.
Contacts For media enquiries only:
Financial Services Commission of Ontario
Toll free: 1-800-668-0128, ext. 7795