Delviro: $2,025,000 to settle, and a $15,864,573 consent to judgment in escrow

In affidavits supporting his own and his landlord company's proofs of claim in the bankruptcy of Delviro Inc., Joseph Delonghi explained how he had recorded the money he moved between the LED maker and his other companies: his arrangements "were not documented as detailed as I would have done if third unrelated parties were involved, since from my perspective, everything was me Joe DeLonghi in substance." The passage is quoted in the Third Report of the Receiver, Jan. 20, 2026, para. 29.

Delviro had designed, made and sold LED fixtures since 2009 from leased space at 94 Brockport Drive in Etobicoke. The building belongs to Lighting Fund Investments Inc. (LFI), one of six companies the receiver describes as controlled by Mr. Delonghi; among the others are the owner of a warehouse complex in Buffalo and a company associated with McVeigh's Irish Pub on Church Street, per the Third Report, Jan. 20, 2026, paras. 16–17, 22–23. Between January 1 and October 3, 2024, the receiver's chart shows Delviro paying $13,784,497 to the related parties and receiving $19,238,797 from them, per the Third Report, Jan. 20, 2026, paras. 106–107. The receiver's motion claimed the first figure, among others; Mr. Delonghi's answer started from the second.

On July 3, 2026, days before the hearing of that motion, Ernst & Young Inc., National Bank of Canada and the related parties signed a global settlement for $2,025,000. Justice Steele approved it on July 16, per the Order (Settlement Approval), July 16, 2026, paras. 1–2 and the Receiver's factum, July 14, 2026, paras. 10(a), 21(a).

A bank, a building and a plan that did not close

National Bank extended facilities to Delviro in February 2023 totalling $5,300,000, among them a $3,000,000 operating line and a $2,000,000 equipment loan, backed by a general security agreement and Mr. Delonghi's guarantee, limited to $1,000,000 plus interest, per the Affidavit of Marc Beaudin, Mar. 31, 2025, pp. 25–26 and the Endorsement of Justice Cavanagh, Apr. 14, 2025, para. 3. From November 2023 through April 2024 Delviro paid no interest and no principal, the receiver found, and the bank sent end-of-relationship letters on January 1 and March 29, 2024, per the Third Report, Jan. 20, 2026, paras. 34–37.

In May 2024 Delviro offered a plan: refinance its equipment for about $2,000,000 and have LFI sell the Brockport building for approximately $22,700,000, closing January 2, 2025, with part of the proceeds repaying the bank. The refinancing did not materialize, and by October 24, 2024 the sale had been pushed to January 2, 2026, per the Affidavit of Marc Beaudin, Mar. 31, 2025, paras. 23–25, 34. Delviro stopped operating in late February 2025, per the Third Report, Jan. 20, 2026, para. 41. On April 14, with $5,008,916.71 owing as of March 11 and Delviro consenting, Justice Cavanagh appointed EY receiver on the bank's application, per the Endorsement of Justice Cavanagh, Apr. 14, 2025, paras. 2–3, 9.

Revenue in the year to September 30, 2024 was $9,617,694, down from $13,032,917, with a net loss of $2,976,246, per the Trustee's Preliminary Report, Oct. 23, 2025, para. 17. Mr. Delonghi attributes Delviro's problems to "artificially cheap Chinese 'knock-off' imports", United States tariff threats that caused order cancellations, and residual COVID-related manufacturing disruptions, per his Delonghi affidavit, June 5, 2026, para. 23.

What the receiver says it found

Nearly half of the equipment in a May 2024 appraisal was missing when the receiver arrived. It turned up on June 4, 2025 in the adjoining unit, which a demising wall had divided from Delviro's premises and another tenant now occupied, per the Second Report of the Receiver, June 17, 2025, paras. 16, 22–23. The tenant told the receiver it had bought the equipment, with a paint line, from LFI around March 4, 2025; LFI's invoice was for $86,850.50 plus HST, and LFI collected $98,175 in four payments from April 14 to May 9, per the Third Report, Jan. 20, 2026, paras. 77–81 and the First Supplement to the Third Report, June 9, 2026, para. 12. Mr. Delonghi wrote that he directed the payment to LFI because he "was concerned that National Bank would not let Delviro use the monies to pay its payroll and other business expenses," per the email quoted in the Third Report, Jan. 20, 2026, para. 83.

By the receiver's account, between February 11 and April 11, 2025, seven vehicles left Delviro, five of them for $1.00 plus HST each and two, including a 2017 Bentley Bentayga, by lease transfer. In December 2024 Delviro paid $38,555.60 for a Bobcat loader and sign board on an auction invoice that, at Mr. Delonghi's request, was re-addressed to 16-20 Newbridge Investments Inc., and LFI invoiced another tenant of the building for $355,000 of lights, with the proceeds directed to LFI. Between January and October 2024 Delviro paid $1,249,634 to Kingsett Mortgage on a mortgage over LFI's building, and on May 3, 2024 it repaid $100,000 to Mr. Delonghi's sister, per the Third Report, Jan. 20, 2026, paras. 66–67, 89–90, 96, 101, 112–116.

The largest items were the transfers themselves: $1,294,716 to Mr. Delonghi, LFI, Newbridge, 136 The East Mall Inc. and M&G Hotels Limited in the year before the bankruptcy, payments the receiver says continued after operations stopped, with $263,570 paid in March 2025; and the $13,784,497 paid out between January and October 2024. The receiver dated Delviro's insolvency to January 1, 2024 at the latest, discounting 2023 statements whose equipment figure included $2,169,122.17 for a cigarette rolling machine seized by the Canada Border Services Agency in May 2023 and never released, per the Third Report, Jan. 20, 2026, paras. 42, 51, 54, 62, 106.

Justice Dietrich gave the receiver a trustee's investigative powers on June 26, 2025, with leave to assign Delviro into bankruptcy and to pay the bank up to $600,000 from the auction proceeds, per the Investigative Powers and Interim Distribution Order, June 26, 2025, paras. 2–5. The assignment was filed on October 3, 2025. On January 20, 2026 the receiver moved for declarations that the transactions were preferences under s. 95 of the BIA, transfers at undervalue under s. 96, and preferences or fraudulent conveyances under Ontario statutes, for repayment by each related party, and for an order piercing the corporate veil so that Mr. Delonghi would answer for all of it jointly and severally: $16,920,578 in all, per the Fourth Report of the Receiver, July 9, 2026, paras. 4–5 and the Third Report, Jan. 20, 2026, para. 126.

One set of bank statements, read twice

Mr. Delonghi "used Delviro as a 'piggy bank' for the Related Parties," the receiver's factum said. "Without the Court unwinding these transactions, Delviro's third party creditors will not recover a single dollar." Both passages are in the Receiver's factum, June 19, 2026, para. 3.

On his reading of the receiver's own charts, Mr. Delonghi swore, he and his companies put $2,318,219 more into Delviro than they took out, keeping it alive for another year while he tried to sell it as a going concern. The $16,920,578 "is a mathematical fiction created by the Receiver's refusal to acknowledge the circulation rate," because "a single operating pool of capital fluctuating between $25,000 and $300,000 was utilized to meet daily operational needs." He said the claim exceeded Delviro's liabilities other than to related parties, $7,084,879 on the receiver's exhibit, by more than 200%, and that his money went in "to ensure firstly, that every employee never missed a paycheck," per his Delonghi affidavit, June 5, 2026, paras. 7, 73–74, 87, 90.