Barakaa: ten Ajax townhouses and a sealed price floor

When KSV Restructuring Inc. was appointed receiver in October 2024, the principal of 2145499 Ontario Inc., Hitesh Jhaveri, told it that the company's ten-unit townhouse condominium at 10 Doric Street in Ajax had been substantially completed, "with the primary issue being the installation of an electrical transformer" that Elexicon Corporation had to put in before the property could be energized. The receiver ended up buying the transformer itself. It was installed in December 2025, became operational in February 2026, and cost more than $500,000 with its installation, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 3.0, para. 1. The first contractor, Canx Construction 1989 Ltd., had been engaged for what was then understood to be finishing work and minor repairs. As the outstanding work grew, the receiver, in consultation with the first mortgagee, Foremost Mortgage Holding Corporation, and with Tarion Warranty Corporation, retained North Lakes Developments Inc. to complete the project, on an initial budget of approximately $662,000 that North Lakes now estimates at approximately $965,000. Beyond the transformer, the report lists nineteen kinds of deficiency North Lakes had to address, from persistent leaks, mould, gas leaks and damaged sanitary lines to missing storm connections and electrical meters, the front door landings of every unit, repaving the internal and external roadway and "replacing substantially all interior lights," per the Sixth Report of the Receiver, Aug. 31, 2026, s. 3.0, paras. 2, 5.

The units are now ready to be listed, the receiver reports, and they are the only unsold real property left in the proceeding, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 1.0, para. 7; s. 3.0, para. 6. The receiver has a new name: effective June 1, 2026, KSV's parent company was acquired by an affiliate of AlixPartners, KSV became AlixPartners Restructuring, Inc., and an order of June 3 substituted it in its ongoing Ontario appointments. Its motion asks the court to approve a listing agreement with Forest Hill Real Estate Inc.; to let the receiver sell each unit without returning to court when the price clears a target in a sealed pricing schedule, or, with Foremost's consent, a lower floor; and to have the vesting order for each sale issued by the registrar on the receiver's certificate, per the Amended Notice of Motion, Sept. 4, 2026, paras. 1, 3. At a scheduling appointment on September 4, Justice Jana Steele set the motion for September 18 at noon, for 30 minutes, per the Endorsement of Justice Steele, Sept. 4, 2026, paras. 1–2.

Seven homes sold first

Justice W.D. Black appointed the receiver on Foremost's application on October 21, 2024, under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act, over two Madison Avenue homes in Richmond Hill owned by Barakaa Developer Inc., the Porte Road properties in Ajax owned by Lerrato Inc., and all of 214's property, per the Order (Appointing Receiver), Oct. 21, 2024, para. 2. Foremost's mortgages are registered ahead of every other mortgage on each of those assets. In its First Report, the receiver said one of the primary reasons for the proceeding was that the developers could not give purchasers clean title, including because of $5 million in mortgages registered by three other parties, per the First Report of the Receiver, Jan. 20, 2025, s. 2.0, paras. 7, 9(a). Justice Koehnen ordered those mortgages vacated on March 27, 2025, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 1.0, para. 2; s. 2.0, para. 1.

The sale of 25 Madison Avenue closed on April 1, 2025, and its net proceeds of approximately $1.33 million went to Foremost. The sales of 371, 373 and 375 Porte Road, approved on June 13, 2025, produced $2.75 million, of which $2 million was distributed to Foremost, per the Fifth Report of the Receiver, Nov. 24, 2025, s. 1.0, paras. 4–5; s. 2.1, para. 7; s. 2.2, para. 8. The purchasers of the remaining three homes had been living in them since before the receivership under agreements that never closed. After obtaining orders in October 2025 authorizing it to disclaim those agreements and take vacant possession, the receiver negotiated new ones with the same occupants: $1,025,000 for 369 Porte Road, $925,000 for 377 Porte Road and $2,241,500 for 23 Madison Avenue, per the Fifth Report of the Receiver, Nov. 24, 2025, ss. 3.1–3.2. On December 1, 2025, Justice Cavanagh approved all three, satisfied that the Soundair factors were met and that the negotiations had been conducted "in an even handed manner," per the Endorsement of Justice Cavanagh, Dec. 1, 2025, paras. 8–12.

A month later, Foremost's factum put its distributions from the sales at approximately $3.2 million and its remaining Barakaa and Lerrato indebtedness at an estimated $4.2 million as of December 2025, after distributions, legal and receivership costs, receiver borrowings and accruing interest. The factum supported a motion to widen the receivership to the two companies' receivables, tax refunds, cash and personal property. Foremost alleged that HST refunds of $243,686.93 paid to Lerrato and $118,496.30 paid to Barakaa had not been turned over to KSV, which Foremost had appointed private receiver of those receivables, per the Factum of Foremost Mortgage Holding Corporation, Jan. 2, 2026, paras. 12–20, 24. On January 7, 2026, Justice Myers dismissed the companies' request for an adjournment and, for reasons to be delivered, found it "just and convenient to expand the scope of the receivership in the interests of creditors and stakeholders" of Barakaa and Lerrato, per the Endorsement of Justice Myers, Jan. 7, 2026, para. 2.

The transformer and the warranty

In the First Report, in January 2025, the receiver described Doric as "a substantially completed but vacant 10-unit townhouse condominium project" whose units could not be occupied until a draft plan of condominium was finalized and the development was connected to the power grid. That required a contract with Elexicon covering zoning issues and the sourcing and installation of a transformer, work "expected to take several months to complete," per the First Report of the Receiver, Jan. 20, 2025, s. 2.0, paras. 5–6. The receiver did not expect to close sales "until late 2025 at the earliest," though it was working to list the units within a few months, per the First Report of the Receiver, Jan. 20, 2025, s. 2.0, para. 9(g). Foremost had made an emergency advance of $801,000 on December 13, 2024 to prevent further delays in Elexicon's work, $433,000 of it for the transformer, per the First Report of the Receiver, Jan. 20, 2025, s. 3.0, para. 2. The court brought that advance under the receiver's borrowing charge when it raised the receiver's borrowing authority from $250,000 to $1,200,000 on February 3, 2025, per the Order (Receiver's Borrowing Authority and Charge), Feb. 3, 2025, paras. 2–3. Justice Myers raised it again, to $1.7 million, on October 10, 2025, per the Endorsement of Justice Myers, Oct. 10, 2025, para. 2.

On February 2, 2026, Tarion wrote to the receiver setting out concerns about whether the project was eligible for coverage under Ontario's new-home warranty legislation. On April 6, after consulting Tarion, the receiver and North Lakes signed a Warranty and Pre-Delivery Inspection Agreement: North Lakes would finish the project and repair any deficiencies in its own work that purchasers identified at their pre-delivery inspections, and it would carry no responsibility or liability for any work performed by 214. Tarion accepted the agreement and confirmed that the Doric units are eligible for coverage, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 3.0, paras. 3–4. Since its Fifth Report the receiver has also renewed 214's licence with the Home Construction Regulatory Authority and worked with Keyser Mason Ball LLP and Groundswell Urban Planners Inc. to complete the draft condominium plan required to register the condominium, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 6.0, para. 1(h), (l).

Four mortgages and a borrowing charge

The Sixth Report puts the principal of the secured charges registered against the project at $10,685,000: Foremost at $6,185,000, BIP Management Inc. at $2,000,000, an individual lender at $1,500,000, and BIP and Galidan Inc. together at $1,000,000. Those amounts exclude accrued interest, professional fees, property tax payments made by Foremost and other costs, and all of them rank behind the receiver's borrowings, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 2.0, para. 1. Foremost is also owed approximately $1.6 million under the receiver's borrowing charge, which ranks ahead of every other security interest except the receiver's own charge for its fees, and the majority of Foremost's outstanding funding in the receivership has paid construction costs on the project. Counting those advances, Foremost was owed approximately $7.8 million on August 31, before interest, fees and other costs; it has told the receiver that accrued interest on its loan to 214 comes to approximately $2.2 million, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 1.0, para. 3; s. 2.0, para. 2. The receiver will allocate the amounts borrowed, to the extent applicable, "when and if recoveries are available to do so," per the Sixth Report of the Receiver, Aug. 31, 2026, s. 1.0, n. 2.

Target, floor and the registrar

Forest Hill has been working with the receiver and Foremost for several months while the project was being finished and has its marketing materials prepared. Its agreement, dated August 31, covers the ten units in what it calls "Doric Towns Condominium" and runs to February 28, 2027, then month to month. The commission is 3.5% of the price before HST where a co-operating brokerage represents the buyer, with 2.5% going to that brokerage and 1% to Forest Hill, or 3% where Forest Hill acts for both sides. Marketing is budgeted at $12,000 for the whole project, Forest Hill reports weekly, and the receiver can end the agreement for any reason on 15 days' notice, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 4.0, para. 2; App. "B", ss. 1, 5, 11, 13, 15. The receiver recommends the retention for Forest Hill's experience selling residential property in the Greater Toronto Area, a fee structure it describes as consistent with market, and Foremost's consent as senior secured creditor, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 4.0, para. 5.

The pricing works in three tiers. The receiver may accept any offer at or above a unit's target price; with Foremost's consent it may discount down to a floor price amount; below the floor it needs the court. Both figures sit in a pricing schedule built on Forest Hill's market research, including comparable sales in Ajax and the surrounding area, and filed as Confidential Appendix "1", per the Sixth Report of the Receiver, Aug. 31, 2026, s. 4.1, paras. 1–2. The receiver asks that the schedule stay sealed until every unit is sold or the court orders otherwise, because disclosure "would allow prospective purchasers to determine the price the Receiver is prepared to accept for any Doric Unit," per the Sixth Report of the Receiver, Aug. 31, 2026, s. 5.0, paras. 1–4. The receiver relies on Sherman Estate v. Donovan, 2021 SCC 25, per the Amended Notice of Motion, Sept. 4, 2026, para. 18.

A sale inside those limits would need no motion. "In the Receiver's view, it is not practical nor efficient use of the Court's time, the Receiver resources and creditor money to bring a separate motion for each of the ten substantially identical Doric Unit sales," the report says; prospective approval of sales, it adds, "has been granted by this Court in other real estate proceedings," per the Sixth Report of the Receiver, Aug. 31, 2026, s. 4.3, paras. 1–3. The draft order would rewrite s. 3(j) of the appointment order, which as amended and restated in January requires court approval above $250,000 a transaction or $500,000 in aggregate, per the Amended and Restated Order (Appointing Receiver), Jan. 7, 2026, para. 3(j). Under the new wording, a Doric sale at or above its target price, or its floor with Foremost's consent, on an agreement substantially in the receiver's template form, is a Permitted Transaction needing no approval; for any other property, the $250,000 limit stays and the aggregate rises to $1,000,000. The receiver and its counsel would complete the approved form of vesting order with the purchaser's name, the unit's legal description and the encumbrances, and present it to the Commercial List registrar with a receiver's certificate attaching the agreement. The registrar would be "authorized, empowered and directed to sign, issue and enter each Completed Vesting Order as presented to it," with no attendance in court by counsel for any party. The draft would also seal the schedule and approve the Sixth Report and the receiver's activities, per the Motion Record of the Receiver, Sept. 1, 2026, Tab 4, draft order, paras. 3–8.

The buyers would sign the receiver's template agreement, which names Keyser Mason Ball as the vendor's solicitors. It calls for a 5% deposit paid to that firm in trust, makes the vendor's obligations conditional on a court approval and vesting order, and provides that where a unit is ready for occupancy before the condominium documents are registered, the purchaser takes possession under an occupancy licence until the unit can be transferred, per the Sixth Report of the Receiver, Aug. 31, 2026, App. "C", ss. 1(a), 2(c), 10(a). The receiver describes the form as consistent with residential condominium agreements except for language addressing a sale by a receiver, with "as-is, where is" protections and limited representations and warranties, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 4.2, para. 1, n. 3. If the court approves the process, Forest Hill intends to list the units on MLS at once, notify prospective purchasers, industry contacts and the brokerage community, and then hold open houses and keep a model suite, per the Sixth Report of the Receiver, Aug. 31, 2026, s. 4.1, para. 3.