ASK Associates: the Pickering building is sold and bankruptcy is authorized

The office building at 720 Sheppard Avenue in Pickering has two storeys, eight units and about 9,709 square feet to rent. In the spring of 2025 part of it was occupied by Canadian Tax & Financial Services Inc., a practice that did accounting and tax work for outside clients under the name ASK Associates and kept its registered office in Unit 3. The building belonged to a sister company, 2691855 Ontario Inc. Abdul Khaliq and Fouzia Khaliq were the practice's directors, and Mr. Khaliq was the building company's sole officer and director, per the Third Report of the Receiver, Aug. 13, 2026, paras. 12–15 and the Affidavit of Aleksandar Nakevski, Apr. 24, 2025, paras. 4–7.

Canadian Western Bank financed both companies on commitment letters dated May 12, 2023: a $400,000 demand operating loan to the practice, and a $3,870,000 demand non-revolving term loan to 2691855 Ontario "to refinance the Real Property." It took a $4,625,000 charge on the building registered May 24, 2023, an assignment of rents, a general security agreement from each company, and a guarantee from each company of the other's debt, per the Affidavit of Aleksandar Nakevski, Apr. 24, 2025, paras. 9–13. On March 1, 2025, Canadian Western Bank amalgamated with National Bank of Canada and continued under the National Bank name (para. 3).

On August 19, 2026, Justice Conway of the Ontario Superior Court of Justice (Commercial List) authorized Ernst & Young Inc., the receiver, to pay the building's sale proceeds to National Bank in partial repayment of its secured debt, and to assign either or both companies into bankruptcy, per the Approval of Activities Order, Aug. 19, 2026, paras. 4, 10. The bank, the receiver reported six days earlier, "expects to suffer a material shortfall on its secured claim," per the Third Report of the Receiver, Aug. 13, 2026, para. 37.

Three adjournments

The bank's account of how the relationship ended is the affidavit of Aleksandar Nakevski, an assistant vice president in National Bank's special loans unit. On November 1, 2024 the bank told the borrowers it would not renew the loans and wanted them repaid by February 28, 2025; it received no response. In December it asked for documents the commitment letters required, among them a client list with revenue by client and the companies' Bank of Montreal statements, and sent an engagement letter appointing EY as its financial adviser. The borrowers asked for more time and, the affidavit says, "refused to execute the EY engagement letter until the Bank had reviewed the materials to be provided," per the Affidavit of Aleksandar Nakevski, Apr. 24, 2025, paras. 22–27.

What arrived on January 7, 2025 was "only a portion" of what had been asked for. The bank's concern, as the affidavit puts it, was that "although the Borrowers reported revenues of approximately $3 million for 2024, the BMO statements show account activity exceeding $6 million in both debits and credits, respectively." The bank was "particularly concerned by the significant flow of funds through an account held at another financial institution, which appear inconsistent with the reported revenues of the company." The borrowers wrote on January 16 that more information would follow; the affidavit says none came and the bank could not verify their explanation for the transactions, per the Affidavit of Aleksandar Nakevski, Apr. 24, 2025, paras. 28–33. Demand letters and notices of intention to enforce security under s. 244 of the Bankruptcy and Insolvency Act followed on January 29. No forbearance agreement was reached, no payment had been made on the term loan since January, and the two companies owed the bank more than $4.2 million (paras. 34–41).

The application came before Justice Conway on May 2, 2025, and was adjourned then, on May 6 and on May 22. The May 22 adjournment carried what she called strict terms: by May 31, Mr. Khaliq was to send the bank's counsel confirmation from one or both of two prospective lenders "that all conditions have been satisfied, the commitment is firm, and funds will be paid to the Bank in full satisfaction of its loan no later than 9 a.m. on June 16, 2025." The term was not met. One lender was still reviewing the credit application, and the bank submitted that the lender's term sheet would advance only 80% of the appraised value of the respondents' real estate, "which will be insufficient to repay the Bank's debt." Salman Rana, retained by the respondents the Thursday before, asked for four to six more weeks, per the Endorsement of Justice Conway, June 16, 2025, paras. 1–4.

"I decline to grant any further adjournments," the judge wrote on June 16. "I have already granted three previous adjournments." The underlying facts were not in dispute, and the respondents had filed nothing but an aide memoire asking for the latest adjournment. They had had more than seven months since the non-renewal notice without a firm commitment, and "[a]lthough additional information has been provided in recent days, the Bank's evidence is that it had some difficulty obtaining full transparency into the Respondents' financial position." She appointed EY, noting the bank counsel's point that the respondents could return to court for leave to repay the bank and end the receivership if they found financing, per the Endorsement of Justice Conway, June 16, 2025, paras. 5–6, 9, 11.

What the receiver found

EY, whose reports are signed by Sharon Hamilton and Allen Yao, was appointed receiver, without security, of all the assets, undertakings and properties of both companies, per the Appointing Order, June 16, 2025, para. 2. The practice's five employees were terminated immediately after the appointment. The receiver collected four computers from former employees ("Minimal information was stored on these computers") and, "[a]fter a complex process," reached the companies' OneDrive account and the practice's Gmail accounts, but could find no supporting documentation for the receivable and payable balances, per the First Report of the Receiver, Feb. 4, 2026, paras. 14, 33–34.

The practice's accounting records showed loans receivable of approximately $1,923,000 from 31 parties. Of that, $1,079,360 "appears to be due from five parties that the Receiver understands to be owned or partially owned by, or otherwise associated with" Mr. Khaliq, most of which, on the available bank statements, appears to have been advanced between January 2023 and May 2025. Another approximately $865,000 in accounts receivable was recorded from about 58 parties. On a call on or about June 19, 2025, the receiver reports, Mr. Khaliq asserted that certain transactions in the books were unrelated to the companies and that some receivables had already been repaid, without giving specifics, and agreed to provide supporting documentation; despite repeated follow-ups, the receiver says, he did not. The limited number of replies to its collection letters all denied owing anything. A demand to Mr. Khaliq on December 22 for the related-party loans drew an email the next day saying he would respond; the receiver reports no further response, per the First Report of the Receiver, Feb. 4, 2026, paras. 35–40.

On February 12, 2026, Justice Conway granted the receiver an examination and document production order. It authorizes examinations under oath of Mr. Khaliq and of anyone reasonably thought to have knowledge of the companies' affairs, requires him to attend within five calendar days of a notice of examination, and requires him to "forthwith" produce all books, records and documents relating to the companies, including "accounting records in respect of all loans receivable," and deliver any of their property. He is to pay the receiver's costs of the motion, to be quantified later; if he fails to comply, the receiver may apply for sanctions; and the receiver may seek a further order to examine Fouzia Khaliq, per the Examination and Document Production Order, Feb. 12, 2026, paras. 5–10. The order records that the court heard Mr. Khaliq's submissions; what he said is not in the record read for this piece. The receiver's second and third reports do not say whether an examination has been held.