428 King Street East: the Cobourg Esso the receiver never listed

On June 13, 2025, a relationship manager from Royal Bank of Canada went to 428 King Street East in Cobourg, Ontario, and found the gas station there shut. Each pump carried a sign saying the station was out of fuel. The convenience store was closed, its lights off and its doors locked, and there were no employees on site and no parked cars on the property, according to the affidavit RBC's Manoj Davé swore on June 20, 2025 Affidavit of Manoj Davé, sworn June 20, 2025, para. 21. Mr. Davé, a senior manager in the bank's Special Loans and Advisory Services unit, reached the company's principal, Soyab Baggia, by telephone that day. Mr. Baggia confirmed the station had closed on June 12. He could not explain why the bank had not been told, and he offered no plan for operating the station or repaying the loans, per the Affidavit of Manoj Davé, sworn June 20, 2025, para. 22.

The company, 2770583 Ontario Inc., owned the property and ran an Esso station on it; it had taken title by a transfer registered on March 30, 2021, per the First Report of the Receiver, July 29, 2026, paras. 2–3 and the Approval and Vesting Order, Aug. 11, 2026, Sched. "D". On August 11, 2026, Justice J. Dietrich of the Ontario Superior Court of Justice (Commercial List) approved the sale of the property by Grant Thornton Limited, its court-appointed receiver, to 1001062724 Ontario Inc. The property was not publicly listed for sale. The receiver had an appraisal, realtors' listing proposals and two environmental site assessments in hand when, after consulting RBC, it decided that selling to one of the parties who had come forward before it picked a realtor was likely to net more than a listing, per the First Report of the Receiver, July 29, 2026, paras. 19–20, 25–26, 30, 36. The court approved it at a price that remains under seal Endorsement of Justice J. Dietrich, Aug. 11, 2026, paras. 2, 10, 16.

The bank's account

RBC's loans ran under a credit agreement dated September 7, 2023: a revolving demand facility of $100,000, a fixed-rate mortgage term loan of $3,386,526.51 and a business credit card limited to $10,000. They were secured by a first-ranking mortgage on the property in the principal amount of $5,500,000, a general security agreement dated April 27, 2022, and a guarantee from Mr. Baggia and a second guarantor limited to $3,685,000, per the Affidavit of Manoj Davé, sworn June 20, 2025, paras. 7–8.

By letter dated April 22, 2025, the bank referred the company to its special loans unit, citing, among other issues, liquidity and working-capital concerns, municipal tax arrears on the property, covenant breaches, missed financial reporting and continuing account excesses Affidavit of Manoj Davé, sworn June 20, 2025, para. 12. At a meeting on May 6, Mr. Davé asked for overdue financial reporting, including the 2024 financial statements and the annual fuel volume report for 2024. He also raised that since about mid-March 2025 the company had largely stopped depositing with RBC. Mr. Baggia, the affidavit says, told him he was flowing the company's deposits through his personal account to operate the business and had borrowed funds privately to keep it running, though he would not give details. The credit facilities required the company to bank with RBC, whose security attached to the deposits, per the Affidavit of Manoj Davé, sworn June 20, 2025, paras. 13–15.

RBC demanded payment by letter of May 7, 2025 and delivered a notice of intention to enforce security; both expired on May 20. On May 8 the Town of Cobourg confirmed property tax arrears of $75,749.97, "with arrears going back to 2022." By June 16 the company owed the bank $3,401,330.58, of which $3,273,337.03 was the mortgage loan; that loan was two months in arrears, the arrears totalling $57,163.68, and due to mature on July 27, per the Affidavit of Manoj Davé, sworn June 20, 2025, paras. 17, 20, 24–25, 38. The affidavit also raised the ground itself: given the property's use as a fuel station, there was a possibility of petroleum hydrocarbons above the provincial ministry's standards, and the company had given the bank no up-to-date information Affidavit of Manoj Davé, sworn June 20, 2025, paras. 32, 40. The receiver's First Report later put RBC's claim at $3,252,583.18 as at July 29, 2026, with interest and legal costs still accruing First Report of the Receiver, July 29, 2026, para. 49.

"The Debtor filed no materials in response to this application, and did not attend before me," Justice W.D. Black wrote on August 12, 2025, finding "clear defaults" and appointing Grant Thornton as receiver under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act Endorsement of Justice W.D. Black, Aug. 12, 2025, paras. 5–6; Receivership Order, Aug. 12, 2025, para. 2. The story of how the station failed is therefore the bank's; no response from the company or Mr. Baggia is in the record read for this piece.

What the receiver found

Grant Thornton attended the property on its appointment; the station had already ceased operating. It asked Mr. Baggia for the company's books and records. "Mr. Baggia has not provided any books and records to the Receiver," the First Report says, and the receiver compiled a creditor list from discussions with him and its own understanding of the business First Report of the Receiver, July 29, 2026, paras. 12–13. It knew of no employees; with no payroll records, it could not tell whether any former employees were eligible under the Wage Earner Protection Program Act, and none had contacted it. The company gave it no evidence of insurance. The receiver arranged coverage on the property and engaged a security company to make the periodic inspections the insurer required (paras. 14–17).

Priced three ways

Cushman & Wakefield ULC appraised the property. Pinchin Ltd. prepared Phase 1 and Phase 2 environmental site assessments, and its report, per the receiver, "concluded there was no evidence of environmental contamination at the Real Property." The receiver thereafter took possession First Report of the Receiver, July 29, 2026, paras. 19–21. Environmental consulting was the largest disbursement in the receiver's interim statement of receipts and disbursements to June 15, 2026: $39,950.00 of $99,798.21, against $4,000.00 for the appraisal Interim Statement of Receipts and Disbursements as at June 15, 2026 (Motion Record, First Report App. 8), p. 170.

The receiver asked three national commercial realtors for listing proposals and opened a virtual data room for them that held, among other things, historical gasoline sales volumes and the environmental reports. The proposals came in, with commissions of between 2% and 5% plus HST; what the realtors expected the property to fetch is in a sealed appendix, per the First Report of the Receiver, July 29, 2026, paras. 23–25, 30.

Two offers, and a third try

Before it chose a realtor, the receiver learned of four parties that had expressed interest in buying and asked each for a proposal. Three said they would make offers; two did. The offer from 1001062724 Ontario Inc. was, in the report's words, "substantially higher" than the one from 2849736 Ontario Inc., which the receiver describes as related to the owner of the adjacent property First Report of the Receiver, July 29, 2026, paras. 26–27. The receiver told both that it had received multiple offers. The purchaser submitted a revised offer with a higher price; 2849736 replied that it believed its offer represented market value and did not revise it. The receiver negotiated with the purchaser again and succeeded in increasing the price further (paras. 28–29).