61-69 Ainslie Street: $6.3 million of the price was released debt

Two towers were supposed to go up at 61-69 Ainslie Street South in Cambridge, Ontario: 21 and 18 storeys with a podium, 392 residential units, 13 ground-floor commercial units, 300,576 square feet of gross floor area and 335 parking stalls. That is the project as the lender's chief operating officer described it when MarshallZehr Group Inc. applied for a receiver in July 2024, per the Affidavit of Murray Snedden, July 5, 2024, paras. 1, 4, and as the receiver described it two years later, calling the land "approved for development of two high-rise residential towers." The receiver's first report adds a sentence about what had been done with the approval: "The Project had not been advanced by the Respondents prior to the Receiver's appointment," per the First Report of the Receiver, July 21, 2026, paras. 6, 9.

The receivership's own accounts show what holding the land cost. Between August 22, 2024 and June 30, 2026 the receiver paid $22,425.00 in maintenance fees, $16,402.32 in fence rental, $11,486.82 for utilities and $5,036.85 for insurance, per the First Report of the Receiver, July 21, 2026, para. 28, App. G.

On July 29, 2026, Justice W.D. Black of the Ontario Superior Court of Justice (Commercial List), court file CV-24-723795-00CL, approved the sale of the land to 61-69 Ainslie Street Ltd. for $7,428,525.00, of which $6,300,000 is satisfied by the release of debt now held by Ducimus Capital Inc. He signed the approval and vesting order, and a second order that discharges GlassRatner Restructuring Inc. as receiver once it files a discharge certificate, the day after an individual who says he invested $200,000 in the property emailed an objection and asked for an adjournment, per the Approval and Vesting Order, July 29, 2026, paras. 2–3, the Ancillary Relief and Discharge Order, July 29, 2026, paras. 12–13 and the Supplemental Report to the First Report of the Receiver, July 28, 2026, paras. 5–6, 11.

Two demands, and correspondence that went unanswered

The borrower, 2699380 Ontario Inc., owns the land. Atlantic Development Group Ltd. and 2721259 Ontario Inc. provided it with land development, design and project management services, and Adeel Khan and Noman Khan were the sole directors and officers of all three, per the Affidavit of Murray Snedden, July 5, 2024, paras. 3–7. MarshallZehr, which syndicates construction and development financing, made up to $6.3 million available under a commitment letter of November 25, 2022. It took a first-ranking $7.6 million charge registered on December 21, 2022, general security agreements from all three companies, and an unlimited joint and several guarantee from the two directors and the two service companies, per the Affidavit of Murray Snedden, July 5, 2024, paras. 8–10.

The borrower missed the interest payment due January 2, 2024 and did not meet the commitment letter's reporting requirements. MarshallZehr demanded payment on January 25 and sent notice under s. 244 of the Bankruptcy and Insolvency Act. A February 8 amendment extended maturity to June 1, 2024, and the borrower agreed, in part, to fund the interest reserve immediately; it did not fund it in full. A second demand followed on May 16 and a notice of sale under the mortgage on May 28, per the Affidavit of Murray Snedden, July 5, 2024, paras. 17–20 and the Endorsement of Justice W.D. Black, Aug. 22, 2024, paras. 4–8.

By July 4, 2024 the borrower owed more than $6,623,385.65, and it had signed a listing agreement with CBRE on April 26. "Despite requests for updates on the sale process, the Lender has had no visibility or updates on CBRE's activities," per the Affidavit of Murray Snedden, July 5, 2024, paras. 26–27. A site plan application had gone to the City in April 2022 and drawn comments that August. MarshallZehr expected approval in the second quarter of 2024 and had received "no further updates on the status of the development from the Borrower," and its correspondence about forbearance had gone unanswered since May, per the Affidavit of Murray Snedden, July 5, 2024, paras. 28, 30.

None of the respondents came to the scheduling appointment before Justice Osborne or to the hearing on August 22, 2024, "despite the applicant's counsel clearly having provided appropriate notice to the respondents," Justice Black wrote. He appointed B. Riley Farber Inc., which now operates as GlassRatner, as receiver that day, per the Endorsement of Justice W.D. Black, Aug. 22, 2024, paras. 9–11 and the First Report of the Receiver, July 21, 2026, para. 2 n. 1.

A sign-back that drew no reply

On September 10, 2024 the receiver asked four brokerages for listing proposals. CBRE Limited told it that it had previously been engaged by the debtors to market the land, and after consulting MarshallZehr the receiver signed a new listing agreement with CBRE dated October 16, per the First Report of the Receiver, July 21, 2026, paras. 15–16. That agreement entitles CBRE to a $50,000 fee if the court approves either a refinancing by the owner, or people or entities related to it, that ends the sale process and discharges the receiver, or "a credit bid by a mortgagee of the Real Property, or an affiliate or assignee of a mortgagee," per the First Report of the Receiver, July 21, 2026, para. 17.

CBRE listed the land on October 22, 2024, put it on MLS, sent email distributions reaching audiences of 1,600 to 2,200 potential purchasers, and engaged with 22 potential purchasers to sign non-disclosure agreements and enter a data room, per the First Report of the Receiver, July 21, 2026, para. 18. Two sets of discussions became serious. One party submitted an offer dated July 24, 2025 at a price "substantially less in the amount that the Receiver was prepared to accept"; after further talks among CBRE, the receiver and the offeror, the receiver signed the offer back at a higher price on January 27, 2026. "The Receiver did not receive any response to the sign-back." The other party sent a letter of intent conditional on final approval of municipal zoning applications, and the receiver did not negotiate it, per the First Report of the Receiver, July 21, 2026, para. 19.

The sale process produced more than 2,290 MLS views between October 2024 and June 2026 and engagement with more than 40 potential purchasers. In the receiver's summary, it "did not yield any viable offers for the Real Property," per the First Report of the Receiver, July 21, 2026, para. 24.

Ducimus, behind the loan and then holding it

The first report describes Ducimus Capital Inc. as "the primary investor in MZ's loan to the Debtors." Under an assignment of security agreement dated as of June 19, 2026, MarshallZehr's debt and security passed to Ducimus on July 14, and the receiver learned of it that month, per the First Report of the Receiver, July 21, 2026, paras. 7, 11, 20.

The discharge statement appended to that assignment put the debt at $10,509,129.25 as of July 1, 2026, including $6,300,000.00 of land-loan principal, $3,768,252.87 of unpaid interest on it and the $200,000.00 the receiver had borrowed from MarshallZehr under its court-ordered borrowing charge. The land loan carried prime plus 4.55% with a 10.50% floor, and the statement set a per diem of $5,864.59, per the First Report of the Receiver, July 21, 2026, paras. 26–27, App. D. Aird & Berlis LLP, engaged by the receiver as independent counsel, gave an opinion that the assigned security is valid and enforceable and was properly perfected, subject to customary qualifications, per the First Report of the Receiver, July 21, 2026, para. 12.

Following negotiations between the receiver and Ducimus, the report says, the receiver entered into an asset purchase agreement dated July 21, 2026 with 61-69 Ainslie Street Ltd. The price is $7,428,525.00, satisfied by a cash payment for the obligations ranking ahead of the assigned security at closing, including estimated receiver's fees and all amounts secured by the receiver's borrowing charge; by the purchaser providing evidence of the release of $6,300,000 of what the debtors owe Ducimus under the assigned security; and by the purchaser's assumption of the assumed liabilities, per the First Report of the Receiver, July 21, 2026, paras. 3, 21–22. The agreement calls the released $6,300,000 the "Credit Bid Debt" and makes the rest of the price a cash payment on closing. It does not describe the purchaser's relationship to Ducimus; among the purchaser's closing deliveries is "an assignment agreement assigning to the Purchaser Ducimus' interest in the Credit Bid Debt." The land is sold "as is, where is," per the First Report of the Receiver, July 21, 2026, App. E, ss. 4–5, 18, 27(e). The receiver, which judged the agreement "the highest and best offer for the Purchased Assets," recommended approval, per the First Report of the Receiver, July 21, 2026, para. 24.

A $200,000 claim over the proceeds

The objection came from an individual who contacted the receiver on October 23, 2024, saying he had made an investment in the property and enclosing two unsigned agreements between himself and one of the debtors' principals: an unexecuted share purchase agreement and a profit participation agreement, per the Supplemental Report to the First Report of the Receiver, July 28, 2026, para. 5. The share purchase agreement appended to the report provides for 2699380 Ontario Inc. to issue him 5% of its non-voting Special Class A shares for $200,000, per the Supplemental Report to the First Report of the Receiver, July 28, 2026, App. B, pp. 13–14. He wrote again on April 10, 2026, advising that in October 2019 he had remitted $200,000 by bank draft to the trust account of the debtors' former solicitors in connection with the agreements, per the Supplemental Report to the First Report of the Receiver, July 28, 2026, para. 6.

Relying on Section 12 of the profit participation agreement, he asserted a proprietary trust claim over the $200,000 and demanded, among other things, that the receiver segregate $200,000 from any sale proceeds and give a written undertaking that no distribution would be made to the secured creditor until his claim was resolved, per the Supplemental Report to the First Report of the Receiver, July 28, 2026, para. 7. The receiver, having reviewed the agreements with counsel, answered on April 15 and 16 that the share purchase agreement contains no trust language and would, if anything, give rise to an equity claim subordinate to all other creditors, and that the trust language in Section 12 is "expressly limited to receipts and revenues forming part of 'Net Profits'" and arises only if the development is completed and net profits are realized, per the Supplemental Report to the First Report of the Receiver, July 28, 2026, para. 8. As neither had happened, the receiver told him it did not agree that he held a trust claim; it would not commit to a holdback, added him to the service list and "strongly encouraged" him to retain counsel, per the Supplemental Report to the First Report of the Receiver, July 28, 2026, paras. 8–9.

He did not write again until July 28, 2026, after the motion record was served, when he emailed the receiver's counsel, copying the Commercial List office, with a notice of objection and a request to adjourn the motion, per the Supplemental Report to the First Report of the Receiver, July 28, 2026, paras. 10–12.

The receiver's supplemental report, dated the same day, maintained that he "has not established a proprietary trust claim over the sale proceeds," and that his claim, if valid, is an unsecured claim against the estate rather than a proprietary claim against the land or the proceeds, per the Supplemental Report to the First Report of the Receiver, July 28, 2026, paras. 13, 15(a). The net proceeds are not expected to satisfy the assigned security, the receiver wrote, so no surplus is expected for unsecured creditors or equity holders "regardless of the characterization of his claim." He had been aware of the receivership and the sale process since October 2024, and an adjournment would add professional fees and carrying costs "to the further detriment of recoveries in circumstances where a substantial shortfall to the Assigned Security is already anticipated," per the Supplemental Report to the First Report of the Receiver, July 28, 2026, paras. 14–15.

Two orders on July 29

Justice Black heard the motion by videoconference on July 29 and signed both orders that day; neither addresses the objection. The approval and vesting order approves the transaction and, on delivery of the receiver's certificate, vests the land in 61-69 Ainslie Street Ltd. free and clear of claims, including "trusts or deemed trusts." Among the instruments deleted from title are MarshallZehr's charge and notice of assignment of rents, their July 14, 2026 transfers to Ducimus and a court order registered in September 2024; for determining the nature and priority of claims, the net proceeds stand in the place of the land, per the Approval and Vesting Order, July 29, 2026, paras. 2–5, Sched. C.

The ancillary relief and discharge order approves the first report and the receiver's activities, its statement of receipts and disbursements, the fees of the receiver and its two law firms, and accruals, before HST and disbursements, of $35,000 for the receiver and approximately $50,000 for counsel to finish the file. After the approved fees are paid and the accrual kept back, it authorizes and directs the receiver to pay Ducimus net sale proceeds up to what the receiver owes on its borrowings, then, "in partial satisfaction of the indebtedness owing by the Debtors to Ducimus," any unused accrual and "all remaining net proceeds from the Debtors' property." Those distributions are made free and clear of claims, including trusts "whether contractual, constructive, statutory, or otherwise." When GlassRatner files its discharge certificate it is discharged and released, "save and except for any gross negligence or willful misconduct," per the Ancillary Relief and Discharge Order, July 29, 2026, recitals and paras. 3–13.

GlassRatner's fee affidavit, sworn by Richard Williams, a managing director and licensed insolvency trustee, counts 209.75 hours and $107,333.50 in fees from July 19, 2024 to May 31, 2026, $132,393.47 with disbursements and HST. Chaitons LLP, the receiver's counsel, billed $23,516.50 in fees from September 30, 2024 to June 30, 2026, per the First Report of the Receiver, July 21, 2026, App. H, para. 3 and Exh. B; App. I, para. 2. Among the tasks the receiver listed as left before it files the certificate are finishing its HST reporting and terminating the property maintenance and temporary fencing contracts, per the First Report of the Receiver, July 21, 2026, para. 38.