Comfort Smart Homes: Peakhill's terms for letting a buyer assume its mortgages

Peakhill Capital Inc. set out what it would take to let a buyer assume Comfort Smart Homes Incorporated's mortgages in a six-page Assumption Letter dated August 10, 2026, addressed to Shane Richard of Ridgeway Management Inc. It wanted a $22,500 good-faith deposit on acceptance of the letter, which Peakhill would keep if it did not approve the assumption or the buyer did not proceed with it. Then came twelve conditions, whose satisfaction Peakhill would judge "in its sole discretion." They include a $45,000 assumption fee, or $30,000 if only one of the two loans closed, a $1,500 inspection fee and, last on the list, a replacement-of-covenant approval letter from the Canada Mortgage and Housing Corporation. The letter puts CMHC's timeline for a replacement of covenant at "approximately 2-3 months," per the Fourth Report of the Proposal Trustee, Oct. 15, 2026, App. L (Assumption Letter, Aug. 10, 2026, pp. 1–2).

Grant Thornton Limited, Comfort's proposal trustee, received a copy on October 1, enclosed with a letter from Peakhill's counsel, Cox & Palmer, which said the Assumption Letter had been sent to Mr. Richard by email on August 31. The trustee had asked Peakhill for its terms on September 11. What followed is set out in the trustee's Fourth Report, dated October 15, which supports Comfort's motion, returnable on October 16, to extend its stay of proceedings to November 30, per the Fourth Report, paras. 35, 38, 44, 48 and App. L and the Notice of Motion, Oct. 9, 2026, p. 1.

The terms matter because of how Ridgeway's stalking-horse bid for Comfort's five multi-unit residential buildings in Truro and Truro Heights, Nova Scotia, reported here on September 5, is priced, per the Fourth Report, para. 17(e) and App. D, note 5. Comfort chooses, after the bid deadline, between $3,800,000 in cash and the assumption of its debt to Peakhill and its obligations under Peakhill's security, with cash for the court-ordered charges, municipal closing adjustments, any secured Canada Revenue Agency claim and post-filing costs, per the Stalking Horse Agreement, Aug. 28, 2026, s. 1.1(y) and the Third Report of the Proposal Trustee, Aug. 31, 2026, para. 47. In August the company and the trustee said the assumption, if selected as the successful bid, would among other things eliminate Peakhill's $1,050,000 prepayment penalty and "any personal guarantees of Peakhill's mortgage debt obligations," per the Third Report, paras. 23, 57(a). The signed orders of September 4, attached to the Fourth Report, show that Registrar Raffi A. Balmanoukian approved the agreement "for the purposes of the SISP," adding that this "does not include approval for any sale arising from the SISP," and extended the stay to October 19, per the Fourth Report, paras. 5, 7 and Apps. A (Third Extension Order, para. 3) and B (Stalking Horse Agreement Order, para. 2).

Two letters to Peakhill, and an email from CMHC

The trustee's September 11 letter to Cox & Palmer concerned what it called "the floating purchase price option within the Stalking Horse Agreement contemplating the assumption of Comfort's existing debt obligations to Peakhill by the Stalking Horse bidder with the consent of Peakhill." It asked for the information, terms, conditions and timelines on which Peakhill would consent if the stalking-horse agreement were selected as the successful bid, whether CMHC insurance of the debt was a condition of that consent, and the name of Peakhill's contact at CMHC, so that the trustee could put similar questions to the insurer, per the Fourth Report, para. 35 and App. K (letter of Sept. 11, 2026).

Before Peakhill answered, the trustee and Comfort's counsel went to CMHC themselves. On September 17, the report says, they met with a general agent of CMHC to learn on what terms and timeline it would extend its insurance to Peakhill under an assumption. In a follow-up email, Comfort's counsel at O'Keefe & Sullivan told CMHC, "We have already engaged with the lender/mortgagee regarding the potential assumption/transfer," and asked to deal with CMHC directly "to help expedite the process and keep the SISP timeline on track." CMHC's contact centre replied on September 17 that "assumption matters are strictly to be discussed with the lender," that "CMHC's relationship in this context is with the lending institution, not the borrower or their agents directly," and that a lender unsure how to proceed would need to reach CMHC's underwriting department, per the Fourth Report, para. 36 and App. J.

Peakhill had not replied by September 25, when the trustee wrote again: "After following up multiple times, we have not received a response to our letter dated September 11, 2026. The lack of a response from your client, Peakhill Capital Inc., will have to be noted by the Proposal Trustee in its next Court filings," per the Fourth Report, para. 37 and App. K (letter of Sept. 25, 2026).

The answer, dated October 1, thanked the trustee for its "patience in awaiting the above." Peakhill does not estimate its own internal timelines for reviewing a buyer's materials, its counsel wrote, but "it does estimate that CMHC would itself require 2-3 months," and counsel understood that the items Peakhill had requested had not been received at the time of writing. Peakhill also confirmed "that the continuation of uninterrupted insurance coverage for its debt and security by CMHC is a condition to its consent to an assumption," and gave the trustee a contact at CMHC, per the Fourth Report, App. L (Cox & Palmer letter, Oct. 1, 2026, pp. 1–2).

What the Assumption Letter asks

The Assumption Letter names Ridgeway as proposed borrower and Mr. Richard as proposed guarantor. It lists six existing guarantors, among them Comfort's parent, 4417032 Nova Scotia Limited; 3339063 Nova Scotia Limited; Fabian Fraser, Comfort's sole director; and Colin Hennigar, who the trustee understands owns and controls 3339063 Nova Scotia Limited, a 30% shareholder of the parent, per the Fourth Report, App. L (Assumption Letter, p. 1) and the First Report of the Proposal Trustee, June 30, 2026, para. 18. The transaction, the Assumption Letter says, "requires the approval of Peakhill and Canada Mortgage and Housing Corporation." It puts the two loans at $2,852,805.08 and $866,825.96 as of August 10, and Peakhill's October 1 letter ties the first to Anita Crescent and the second to Minerva Drive, per the Fourth Report, App. L (Assumption Letter, pp. 1, 3; Cox & Palmer letter, p. 2).

Beyond the fees, Peakhill's conditions include the purchase agreement and its amendments, a signed rent roll, an organizational chart "the structure of which shall be satisfactory to Peakhill," an insurance policy meeting Peakhill's requirements and, on the proposed borrower and guarantor, whatever background and financial information Peakhill may require, including "personal resume and background information on principals, signed and dated net worth statements," evidence of the source of downpayment funds, three years of financial statements for each entity and the most recent T1 forms for each individual, per the Fourth Report, App. L (Assumption Letter, pp. 1–2).