Anderson Square: withdrawing a proposal after the buyers' judgment fell

Prima stands at 6833 Buswell Street in downtown Richmond: 109 residential strata lots and ten commercial ones, built by Anderson Square Holdings Ltd. under an earlier project name, ALFA. Eight of the residential lots are rented out as affordable housing. The residential occupancy permit was meant to come in April 2019 and did not issue until September 2022, a delay the company puts down to a late building permit, the replacement of its general contractor partway through construction, and lien claims. Anderson Square is a wholly owned subsidiary of Anderson Plaza Holdings Inc., which the company describes as its "one known potential secured creditor," per its Notice of Application, Sept. 23, 2026, Part 2, pp. 2–3, paras. 2–4, 9.

On September 23, 2026, the company asked the Supreme Court of British Columbia, in Bankruptcy, Vancouver Registry, No. B-230561, to declare its notice of intention of November 27, 2023 and both of its proposals, of May 10 and May 30, 2024, deemed withdrawn; to end the stay they triggered under the BIA; and to declare that the withdrawal does not deem the company bankrupt "by reason only of there being no proposal approved by the Company's creditors" or by the court. The Office of the Superintendent of Bankruptcy would be directed to amend its records. The application is set for 2:00 p.m. on September 28, 2026 before Justice Stephens, who is seized of the matter, with two hours estimated, per the Notice of Application, Sept. 23, 2026, p. 1 and Part 1, para. 1.

The parent's demand and the buyers' lawsuit

The proposal trustee, Deloitte Restructuring Inc., understood that a number of lenders lent to Anderson Plaza for the development, that the funds were passed to Anderson Square, and that mortgages were registered against the unsold units in Anderson Plaza's favour. On November 20, 2023, Anderson Plaza's counsel, Watson Goepel LLP, demanded $64,092,907.87 as at November 15, 2023: three series of advances made between May 2016 and December 2022, interest at 6.50% and, on part of the last series, 9.50%, and $2,500 in legal fees. With the demand came a notice of intention to enforce security under s. 244 of the BIA, giving the company until November 30 to pay. The company did not have the funds on hand to satisfy it, per the First Report of the Proposal Trustee, Dec. 20, 2023, paras. 13–14 and App. "A". On November 27 the company filed its notice of intention under s. 50.4(1), with Deloitte as proposal trustee, per the Notice of Application, Sept. 23, 2026, Part 2, p. 4, para. 1.

On November 15, 2019, a group of purchasers who had signed pre-sale contracts for Prima units sued the company in Action No. S-1912984, alleging that it had unlawfully terminated their contracts. The trustee counted 35 of them, under 32 contracts signed in 2015 and 2016. It understood that the company had terminated the contracts in 2019 and returned the deposits with interest, and that the buyers had obtained relief from the NOI stay on November 29, 2023 so that their trial could go on, per the First Report of the Proposal Trustee, Dec. 20, 2023, para. 38(c). The trial concluded on December 20, 2023, and on February 9, 2024 the court found the company liable for damages totalling $13,093,900; the company filed a notice of appeal on March 7, per the Notice of Application, Sept. 23, 2026, Part 2, p. 3, paras. 7–8.

Eighteen minutes on May 31

By the spring of 2024 the trustee had run a claims process, and it had cut the parent's claim down. Anderson Plaza filed a secured proof of claim for approximately $64.1 million, asserting a mortgage over the unsold strata lots granted under a forbearance agreement with the company and, in the alternative, a constructive trust over the project and a $10.0 million equitable mortgage. On May 7, 2024 the trustee issued a notice of partial disallowance that recast the claim as unsecured and allowed approximately $46.7 million, net of interest, per the Proposal Trustee's Report to Creditors, May 21, 2024, para. 26(a). The allowed figure was $46,762,798. Anderson Plaza applied on June 6, 2024 to set the disallowance aside. Scott Construction, the original general contractor, filed a secured claim of $5,396,170 and an unsecured one of $51,330, per the Notice of Application for Sanction Order, June 19, 2024, Part 2, paras. 20–22, 25. Its secured claim ran against the approximately $5.4 million the company had paid into court in December 2020 to clear the liens from title, which the trustee treated as trust funds rather than the company's assets, per the Proposal Trustee's Report to Creditors, May 21, 2024, paras. 19, 25, 26(b).

The amended proposal put every unsecured creditor in one class and offered a pro rata share of the proceeds of the unsold units, excluding the eight affordable units, and of the company's cash, less whatever the trustee held back to run the company and the proceeding. The first distribution would come within 15 business days of a sanction order and five more would follow, each after another fifth of the inventory sold. Its purpose clause said what failure meant: "If the Proposal is not accepted by the Unsecured Creditors, the Company will be deemed bankrupt." Every unsecured creditor could vote "except for Anderson Plaza Holdings Inc. to the extent restricted by the BIA," per the Amended Proposal, May 30, 2024, ss. 1.1, 2.1, 2.3, 3.1–3.2.

The trustee told creditors that recoveries were "difficult to estimate" while both large claims were contested, and gave ranges. It put the net realizable value of the assets, before professional fees, at approximately $70.0 million to $75.0 million under the proposal and $64.0 million to $69.0 million in a bankruptcy. With Anderson Plaza's claim counted as filed and secured, the buyers' $13,093,900 would receive between $6,197,766 and $10,984,978 under the proposal and between $184,634 and $4,971,846 in a bankruptcy; with the claims as the trustee had allowed them, its table showed both paid in full in every scenario, per the Proposal Trustee's Report to Creditors, May 21, 2024, paras. 50–51.

The meeting opened at 8:30 a.m. on May 31, 2024 at Norton Rose Fulbright's Vancouver offices, with Jeff Keeble of Deloitte in the chair. Anderson Plaza, which had filed as secured and whose claim was in dispute, was treated as an excluded creditor with no vote, and Scott was excluded as well. Because the company was appealing the judgment, the chair marked the buyers' claim "objected to" under s. 108(3) of the BIA and allowed it to vote "subject to the vote being declared invalid in the event of the objection being sustained," per the Report of Proposal Trustee on Proposal, June 18, 2024, paras. 5, 8 and Ex. "E". One voting letter arrived, on the buyers' claim, in favour. No other votes were cast, the amended proposal was deemed approved, and on a motion by the buyers' counsel the meeting adjourned at 8:48 a.m., per the Report of Proposal Trustee on Proposal, June 18, 2024, para. 9 and Ex. "E", p. 3. The trustee's approval application, returnable July 3, 2024 before Justice Stephens, put it this way: "the only creditor entitled to vote on the Amended Proposal voted in favour," per the Notice of Application for Sanction Order, June 19, 2024, Part 3, para. 4.