Clarkson Road: the lien claimant who paid out the DIP

The land at 1111 Clarkson Road sits south of the QEW, close to the Clarkson GO station in Mississauga, and the plan for it was five townhouse buildings with 176 units and 28,000 square feet of commercial space, per the Pre-Filing Report of the Proposed Monitor, May 3, 2024, pp. 9–10. When the developers filed under the CCAA in May 2024, construction had been stopped since the previous August over a dispute with the construction manager, and "approximately 60% of the parking structure is at grade level, with the remainder below-grade and not fully covered or sealed." The site needed fencing, protection for the below-grade structure, dewatering and daily safety and structural monitoring, per the Endorsement of Cavanagh J. re Initial Order, May 3, 2024.

The construction manager was Kenaidan Contracting Ltd. On September 8, 2026, in a new application under its own court file, Justice Cavanagh appointed PricewaterhouseCoopers Inc. — the CCAA monitor since 2024 — as receiver of the five debtor entities on Kenaidan's application. Kenaidan holds "two perfected construction lien claims totalling over $25 million." The endorsement gives the history in three sentences: "Over approximately two years, the CCAA Proceedings failed to produce a viable transaction to maximize value for stakeholders. In late 2025, the DIP Lender ceased funding, leaving the CCAA Proceedings without resources to continue. The stay of proceedings lapsed on February 28, 2026 and has not been renewed," per the Endorsement of Cavanagh J. re Receivership, Sept. 8, 2026, paras. 1–2.

The debt, and who was on which side of it

The developers are part of what the proposed monitor called the South Shore Group, a Greater Toronto Area developer. They bought the land partly with a $20 million vendor take-back mortgage, which passed to CS Capital Limited in December 2023, per the Pre-Filing Report of the Proposed Monitor, May 3, 2024, p. 10. By filing, the mortgage was in default, CS Capital had begun enforcing, and construction liens of approximately $27 million were registered against the property. CS Capital supported the filing as a route to a quick sale process with a stalking horse.

The proposed monitor described the fight with Kenaidan as it understood it. Construction had been funded through a deferred payment arrangement under which payments to Kenaidan would wait for third-party financing; the developers and Kenaidan were in dispute over that arrangement and over the developers' allegations that Kenaidan's work was over budget and its claims unsupported or not payable; and Michael Moldenhauer had talked to Kenaidan about what was owed without reaching a settlement, per the Pre-Filing Report of the Proposed Monitor, May 3, 2024, pp. 10–11. Kenaidan's lien claim has never been adjudicated; the claims procedure approved in September 2025 was not completed.

A six-month option

The sale process ran for eight weeks through CBRE and drew no qualified bid except the stalking horse, an investment agreement with 1000861289 Ontario Inc. In August 2025 the developers brought back an amended and restated version: the investor would assume or pay every claim ranking ahead of the construction liens and pay $22 million in cash, a transaction the monitor valued at approximately $35.2 million plus assumed liabilities as of a February 23, 2026 closing, per the Endorsement of Cavanagh J., Sept. 11, 2025, paras. 14, 31, 39, 42. The investor needed about six months to raise the money.

The monitor put the closing risks on the record. There was no financing condition, but without financing there would be no closing. And "the Investor and the DIP lender are under common control," with the agreement letting the investor decide whether the DIP debt was assumed or paid out. Kenaidan, the largest creditor, supported the deal; so did CS Capital; the DIP lender said it would not fund another sale process. Delgant (T.O.) Limited, a lien claimant, opposed it, arguing that the deal was "in substance a six-month option for the principal of the Applicant Entities, the DIP Lender and the Investor to attempt to re-acquire the property if their principal is able to secure financing," and noting that the purchaser was "controlled by Michael Moldenhauer who is the principal of the Applicants, the Investor, and the DIP Lender," per the Endorsement of Cavanagh J., Sept. 11, 2025, paras. 12, 15–16, 22–25.

Justice Cavanagh approved it on September 11, 2025. He accepted that the agreement had conditions "which introduce considerable uncertainty concerning whether the transaction contemplated thereby will close," but found the market had been tested, that the broker's advice was that it had deteriorated since, and that there was no evidence financing existed for a new process. A reverse vesting order was needed to keep the building permits and the agreements with the City of Mississauga and the Region of Peel. The transaction did not yield "any recovery for unsecured creditors or equity holders," per the Endorsement of Cavanagh J., Sept. 11, 2025, paras. 27–30, 36–40. The stay was extended to February 28, 2026, and the general and construction DIP facility was raised from $5.875 million to $7.2 million to carry the site in care and maintenance, with no construction, until closing, per the Endorsement of Cavanagh J., Sept. 11, 2025, paras. 17, 53–59.

February

The additional $1.325 million never arrived. By February 9, 2026, the monitor reported that the developers and the DIP lender had failed to find replacement liquidity and that "no further DIP financing is available to fund the forecast payments contemplated in the Eighth Cash Flow Forecast." Accrued professional fees exceeded the administration charge and the subordinated administration charge combined. The developers had not given the monitor current financial information or bank statements despite its requests. The investor had not secured its exit financing, the transaction would not close, and the investor was not asking for more time. The monitor did not expect the developers to seek another stay extension and anticipated that one or more stakeholders "will seek further relief from this Court prior to the end of February," per the Eleventh Report of the Monitor, Feb. 9, 2026, paras. 9–19.

The stay expired on February 28. The next document on the docket is dated August 17.

Two receivers

Kenaidan's notice of application for a receivership is dated June 17, 2026, supported by an affidavit of Gian Fortuna sworn July 23, per the Receivership Order, Sept. 8, 2026, recitals; neither is on the docket read for this piece. The DIP lender's answer is.

On August 10 the DIP lender made formal demand and served notice of intention to enforce under s. 244 of the BIA, and on August 17 it moved in the CCAA file to have Crowe Soberman Inc. appointed receiver instead. Mr. Moldenhauer swore the supporting affidavit as the lender's principal. He had asked five licensed insolvency trustees about the mandate and "Crowe provided the most cost-effective proposal." His objection to Kenaidan's application was that it paid out some of the DIP debt while disputing the rest: "The DIP Lender is not agreeable to a partial payout by a subordinate lien holder with reserved rights – even if the disputed balance is cash collateralized. The DIP Financing was emergency financing on court-approved terms with a court-approved priority position. The DIP Lender bargained for a clean exit rather than a piecemeal repayment," per the Affidavit of Michael Moldenhauer, sworn Aug. 17, 2026, paras. 38, 48–50, 57. He pointed to the July 2025 term sheet, which let Kenaidan refinance "all, but not any portion, of the existing DIP Facilities."

The lender proposed to fund its own receivership. It would advance the roughly $1,295,833 left undrawn on its facility to pay $219,432 in post-filing trade and supplier claims, $509,000 in accrued professional fees, and $678,000 to 1000302127 Ontario Inc., the company that manages the project. Mr. Moldenhauer is also that company's principal; he deposed that it was owed approximately $1,672,400 in post-filing management fees and was prepared to accept $678,000. The affidavit lists the site's continuing needs — Insitu Contractors Inc. pumping and metering water off the site into the Region of Peel's stormwater system, Mobilease Rentals Inc. trailers forming part of the security perimeter — and disputes Kenaidan's evidence that the project was "currently unprotected," per the Affidavit of Michael Moldenhauer, sworn Aug. 17, 2026, paras. 62–70. It also objected that Kenaidan's proposed order would secure unpaid professional fees through a new charge while leaving non-professional service providers exposed.

The order

When the application came on, it came on by consent. The order recites submissions from counsel for Kenaidan, for PwC and for the DIP lender's agent, "and on the consent of those parties," per the Receivership Order, Sept. 8, 2026, recitals. Justice Cavanagh found a receivership just and convenient: "A neutral third-party must be appointed to take on this engagement. PwC is best positioned to act in that capacity, as Receiver, given its extensive familiarity with the Project, the prior marketing efforts, the stakeholders, and the issues," per the Endorsement of Cavanagh J. re Receivership, Sept. 8, 2026, paras. 3–4.

The order takes effect only when PwC delivers a certificate confirming that $10,549,924 — as at September 8, plus $3,452 a day after — has been funded by Kenaidan, as receiver's borrowings, and paid to 1000861289 Ontario Inc. "in full satisfaction of all claims secured by the Construction DIP Lender's Charge, the DIP Lender's Charge and the Investment Agreement Charge," per the Receivership Order, Sept. 8, 2026, para. 30 and Sched. "B". The DIP charges are paid out in full, as the lender had said they must be, and the lender's counsel consented.

The rest of the structure follows from that. The receiver may borrow up to $11,500,000 from Kenaidan, both to fund the receivership and to repay those three charges, under a receiver's borrowings charge. Ahead of it rank a receiver's charge and, first, a replacement CCAA charge of up to $1,400,000 securing unpaid CCAA-era fees of PwC as monitor, Blakes and McCarthy Tétrault. Every charge granted in the CCAA proceedings is "discharged and extinguished." Kenaidan's costs of the application are paid from the estate ahead of all obligations not secured by the three new charges. And the development fees and permit deposits Kenaidan itself paid to the City of Mississauga and the Region of Peel are carved out of the receivership property altogether, per the Receivership Order, Sept. 8, 2026, paras. 2, 18–19, 22–24, 35.

The order does not provide for the post-filing trades, or for the management company's fees. PwC may sell property without further approval only in transactions of up to $50,000 each and $250,000 in total; anything larger comes back to the court, per the Receivership Order, Sept. 8, 2026, para. 3(h).