3145 Jarry East: after the chosen buyer, a third and final round

On April 9, 2026, lawyers for Elm Acquisition Corp told Richter Inc. that their client was not willing to proceed with its offer for 3145 Jarry Street East, and the offer was terminated. The message came, the receiver reports, "following the completion of a lengthy due diligence" by Elm. Its offer was one of several Richter received on October 20, 2025, in the second of two sale rounds, and the receiver and Equitable Bank, the project's lender, had determined that it "was the best offer and should be accepted, as it was significantly higher than any offer received in both the First Sales Process and Second Sales Process," per the Second Interim Report, June 3, 2026, paras. 16–17 and the First Interim Report, Jan. 30, 2026, para. 26. On April 14, Richter, "in conjunction with EQB," decided to relaunch "a third and final sale process," per the Second Interim Report, June 3, 2026, para. 18.

The property is a 78-unit condominium project in Montréal's Villeray–Saint-Michel–Parc-Extension borough, still under construction when the Superior Court appointed Richter receiver of the property of its owner, 9418-8778 Québec Inc., on May 2, 2025, per the Notice and Statement, May 20, 2025, para. 2(c) and the Second Interim Report, June 3, 2026, paras. 3, 11. The Second Interim Report, signed by Olivier Benchaya and Andrew Adessky, is Richter's first since Elm's offer ended.

The bank's account

The record read for this piece holds no account of the project's troubles from the company; the account is Equitable Bank's, in its application for a receiver dated April 9, 2025. The bank lent the company $16,900,000 under a loan agreement of March 30, 2021 to finance construction, secured by an $18,590,000 first-ranking immovable hypothec, and the term loan matured on September 1, 2023. Between December 7, 2023 and January 25, 2024, the bank lists six legal construction hypothecs registered against the building, one of them by the general contractor, Entrepreneurs Généraux Lambda Inc., for $4,791,802.23, per the Receivership Motion, Apr. 9, 2025, paras. 7–9, 11, 13.

The bank nonetheless agreed to tolerate the defaults. Its forbearance agreement of March 4, 2024 provided for the project to be finished by July 19, 2024 with additional financing from the bank; the company was to put in $300,000, pay the contractors that had registered hypothecs once the new money arrived, and remit GST refunds and pre-sale proceeds to the bank. An amendment of April 12, 2024 set the bank's additional disbursement at $6,012,110.16 and moved completion to October 1, 2024. A transaction of May 4, 2024 between the company and Lambda set completion for November 1, 2024, provided for the hypothecs of Lambda and its subcontractors to be struck, and committed the two to obtain the bank's written authorization before extra work that would raise costs, per the Receivership Motion, Apr. 9, 2025, paras. 14–17.

The company, the bank says, had represented that it would finish by November 1, 2024 at an additional cost of $860,000, which the bank agreed to finance; it turned out the project would not be finished until March 2025. The bank then learned of further costs it had not approved in advance, and Lambda disclosed their amount in an email of January 24, 2025 in which, the bank says, it threatened to leave the site again if not paid. The application alleges that the company knowingly omitted or neglected to remit GST credits and rebates, remitted none of the sums received from pre-sales and sales of units, and knowingly omitted or neglected to get the bank's written approval before extra work whose cost the bank says it was compelled to assume to keep Lambda and its subcontractors on site. Lambda registered a new legal construction hypothec on February 20, 2025, for $1,351,656.33, and Peinture et Murs secs Tango Inc. and Les Industries Thermo Plus Inc. followed on February 21 and 25, all three, the bank says, in breach of the transaction; three more came in March, per the Receivership Motion, Apr. 9, 2025, paras. 18(d)–(g), (i)–(l), 19–21.

On January 27, 2025, the bank says, the company owed it $23,567,632.13, excluding fees and penalties, and the next day the bank served notice of its intention to enforce its security under s. 244 of the Bankruptcy and Insolvency Act. The company, it says, had been unequivocal that it would put no more money into the project, per the Receivership Motion, Apr. 9, 2025, paras. 23–26. The receiver's later summary is shorter: the company "refused to contribute any additional funds in order to complete the Project and pay Lambda and the subcontractors," and by Richter's appointment their work had ceased, per the First Interim Report, Jan. 30, 2026, para. 18.

The adjournment the court refused

On March 14, 2025, on the bank's application, Justice Martin F. Sheehan appointed Richter interim receiver under s. 47 of the BIA, after hearing counsel for the bank and for Capital Corporation Ltd., which his order calls the second-ranking secured creditor, with an administration charge of up to $100,000 ranking ahead of all other charges, per the Interim Receivership Order, Mar. 14, 2025, paras. 3, 9, 28–29.

The application for a full receivership came before Justice Louis Joseph Gouin on May 2, 2025. It had already been adjourned once, the minutes record, because the company's lawyer no longer had a mandate; its current counsel had received his only on April 30, and the company asked for a further adjournment so that he could learn the file. The judge wrote that the application's allegations were "very eloquent as to the urgency of the situation and the Debtor's flagrant lack of diligence" [translation], and allowed himself a comparison: "when the fire has started, you don't wait 15 days to call the firefighters" [translation], 15 days being the adjournment sought. The company also argued there was no longer any urgency, since the building had at last been secured and insured. That had been done, the judge observed, thanks to the interim receiver and the bank, "the latter constantly advancing the funds needed to meet unforeseen and other operating expenses" [translation]. "In short, the Debtor inspires no confidence to ensure the survival of the business" [translation], per the Minutes of Hearing, May 2, 2025, p. 2. He refused the adjournment and issued the order after modifying some of the terms of the bank's draft.

The order appoints Richter receiver under s. 243 of the BIA until the first of several events, among them the completion or sale of the project and a judicial sale of the building as a whole at a commercially reasonable price reflecting its highest and most profitable use. It gives the receiver power to cancel promises to purchase and refund deposits, to bring proceedings over the legal construction hypothecs and other registrations against the building, and to file an assignment in bankruptcy on the company's behalf, and it creates an administration charge of up to $100,000 ranking ahead of all others, per the Receivership Order, May 2, 2025, paras. 9, 12(m), 14–15, 30–31.

Fifteen promises, ten construction hypothecs

Richter's notice to creditors of May 20, 2025 set out what it had taken on. Fifteen of the 78 units were under duly executed promises to purchase, with the deposits held in trust by a notary or real estate agent, and construction work remained, "including the resolution of certain deficiencies." The bank, owed $23,567,632.13, held first rank. Capital Corporation's $3,075,000 hypothec had been "contractually subordinated in favor of EQB," and three numbered companies and an individual had registered further immovable hypothecs of between $900,000 and $2,500,000 each, bringing the immovable hypothecs to $33,067,632.13. Ten creditors had registered legal construction hypothecs totalling $3,295,363.04, the largest Lambda's, at $1,351,656.33, and one of $1,117,901.93 by an architecture firm. Richter said it would review the validity and enforceability of the construction hypothecs, put the total due to creditors at approximately $36,362,995.17, and called it too preliminary to comment on the building's realization value or the bank's recovery, per the Notice and Statement, May 20, 2025, paras. 2(d)–(e), 4.