Comfort Smart Homes: $3.8 million, or the mortgages it has no right to prepay

Comfort Smart Homes Incorporated has not had an employee since it was incorporated. What it has is 43 apartments in five buildings, three of them on Minerva Drive in Truro, Nova Scotia, and two on Anita Crescent in Truro Heights, in the Municipality of the County of Colchester. At the end of June, 34 of those units were let, the tenants' rent was the company's only operating receipt, and until the proceeding began the buildings were managed by Yada Property Management, a company owned and controlled by Comfort's sole director, Fabian Fraser, per the First Report of the Proposal Trustee, June 30, 2026, paras. 15–17, 20, 43(a).

Comfort is wholly owned by 4417032 Nova Scotia Limited, a holding company incorporated in May 2022 whose shares are held 60% by a company Mr. Fraser controls, 30% by 3339063 Nova Scotia Limited, controlled by Colin Hennigar, and 10% by Bereket Ogubaselasse. Mr. Fraser and Mr. Hennigar "have been embroiled in a shareholder dispute," according to the proposal trustee, and Mr. Hennigar had applied under s. 43(9) of the Judicature Act to have MNP Ltd. appointed as a limited-capacity receiver over Comfort, its parent and other related real estate companies, with a hearing set for June 9, 2026, per the First Report, paras. 18–22. On June 8, Comfort filed a notice of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act, naming Grant Thornton Limited as proposal trustee, per the Form 33, Notice of Intention to Make a Proposal, June 8, 2026. The trustee notes that the receivership application, as it relates to Comfort, is subject to the stay that followed, and puts the reason for the filing this way: "Given the dispute between Mr. Fraser and Mr. Hennigar, the Company's current situation has become untenable," per the First Report, paras. 23, 25.

A rental company's books

The proceeding is No. 51-3383517 in the Supreme Court of Nova Scotia in Bankruptcy and Insolvency at Halifax. Comfort was incorporated in 2004 and came under its current ownership through a share transaction in or around July 2022. Its mortgage financing from Peakhill Capital Inc. was committed on October 14, 2022 to "Comfort Smart Homes Inc. (Bare Trustee / Agent on behalf of 4417032 Nova Scotia Ltd.)", and on January 11, 2023 the commitment letters were amended to name Comfort itself as borrower, per the Third Report of the Proposal Trustee, Aug. 31, 2026, paras. 19(b), 51(b), 52. Two other Truro properties, 80 King Street and 88 Kaulback Street, were sold on March 8 and August 1, 2024, and management told the trustee that the Bank of Montreal's loans and mortgage were paid in full from the proceeds, per the First Report, para. 27(h).

The company has never had its financial statements audited, reviewed or compiled, and at filing its most recent statements were internal ones at September 30, 2024. Statements a bookkeeper has since updated to April 30, 2026 show total revenue of $433,759 and a net loss of $25,736 for the year ended April 30, 2026; the net income of $228,599 in fiscal 2025 came mainly from a $196,285 gain on the sale of assets. The largest asset on the balance sheet is $4,193,181 due from the holding company. The trustee, which is still investigating, says it is likely not an asset available for collection, because the Peakhill debt was originally granted to the holding company and passed down to Comfort through intercompany transactions, and the accounting would need to be amended to reflect the change in the borrower's name, per the First Report, para. 26 and the Third Report, paras. 17, 19(a)–(b).

No charges, then a material adverse change

The company's first application sought a $500,000 debtor-in-possession facility from Libra Finance Company Inc. and a $250,000 administration charge. On July 3, Registrar Raffi A. Balmanoukian extended the stay 42 days, to August 14, but adjourned both the charge and the financing "without prejudice" to a renewed request, per the Second Report of the Proposal Trustee, July 21, 2026, App. A (First Extension Order, paras. 3–5). Five days later the trustee reported to the Registrar a material adverse change under s. 50.4(7)(b)(i) of the BIA: Comfort had $31,108 in its operating account and could not pay for an appraisal, environmental assessments, a third-party property manager or the professionals' accrued work, per the Report of Material Adverse Change, July 8, 2026, pp. 1–2.

Libra's revised term sheet of July 13 cut the facility to $350,000, at 13.2% with a $17,500 commitment fee, maturing no later than six months after filing. Two others had offered term sheets: Pillar Capital Corp. at 14%, and 3339063 Nova Scotia Limited, Mr. Hennigar's company, at 12%, with covenants the company considered restrictive and onerous, per the First Report, paras. 46, 49, 52. The company chose a neutral lender "as any information required by Mr. Hennigar could be sought from the Proposal Trustee as an independent officer of the Court," per the Second Report, paras. 29–31, 35. It also asked that the trustee be given control of receipts and disbursements through a third-party property manager, powers the trustee called necessary "Given the ongoing shareholder dispute and allegations related to appropriateness of pre-filing transactions of the Company," per the Second Report, paras. 67–68.

On July 24 the court granted a stay to September 7, the $350,000 facility, a first-ranking $150,000 administration charge for the trustee, its counsel and the company's counsel, a second-ranking charge for Libra and the enhanced powers. A separate order that day, made by Registrar Balmanoukian, approved a sale and investment solicitation process to be run by the trustee in consultation with the company, Libra and Peakhill, per the Third Report, paras. 3, 5 and App. B. In its Second Report the trustee had told the court that this relief was not in conflict with the court's decision to appoint a receiver over four related companies, among them Comfort's parent, 4417032 Nova Scotia Limited, per the Second Report, para. 74.

Peakhill's mortgages

Comfort's creditor listing at filing named two secured creditors: Computershare Trust Company of Canada, care of PeakHill Capital Inc., for $3,700,000, and the Bank of Montreal for $1, per the Creditor Listing as at June 8, 2026. Peakhill holds mortgages on all five buildings and a general security agreement over the property relating to them. The trustee understands BMO has been paid, though its general security agreement had not been discharged, and the Town of Truro and Colchester County were owed $65,394 in property taxes, utilities and betterments, with lien rights under the Municipal Government Act, per the First Report, paras. 29, 31–32.

Clause 8.1 of the CMHC certificate of insurance attached to the Minerva mortgage says there is no right to prepay it, in whole or in part, before maturity; Peakhill's counsel, producing the security on August 5, confirmed the Anita mortgage uses identical language. Peakhill's payout statements as of July 31, 2026 put the Minerva loan at $865,675.03 in principal with a $250,000 prepayment penalty, and the Anita loan at $2,852,485.78 in principal with an $805,000 penalty, per the Third Report, paras. 21–23 and App. D. The trustee has not reached a conclusion on whether the penalties are enforceable; it regards them as "a distribution issue," one that may not need deciding if the stalking-horse bid's assumption option, or a similar bid, wins the process, per the Third Report, para. 24.