District Northwest: no sale yet, so the receiver hires Marcon to rezone

KingSett Mortgage Corporation's commitment letter of February 14, 2022 describes what was meant to rise on the land in Surrey: two towers holding 1,023 for-sale condominiums, about 5,067 square feet of daycare space and five levels of underground parking with 754 stalls, all on a 2.43-acre site. That day KingSett offered $55,750,000 of what the letter calls "first mortgage land and municipal fees financing"; amended three times through March 19, 2024, the loan stood at $79,912,500, per the Affidavit of Daniel Pollack, Oct. 9, 2024, para. 3 and Ex. "A". Selling began in December 2021, through Rennie Marketing Systems, and by the time a receiver was appointed in November 2024, 873 units had been presold by District Northwest Limited Partnership, with deposits of approximately $78 million held in trust. Construction had not begun, per the First Report of the Receiver, Jan. 21, 2025, s. 2.1, paras. 1–2 and the Fourth Report of the Receiver, July 22, 2026, s. 2.1, para. 2.

On July 22, 2026, the receiver reported that "a transaction has not materialized" through the court-approved sale process, and that it had turned, in consultation with KingSett, to Marcon Developments Ltd. about "the potential redevelopment of the Lands," per the Fourth Report of the Receiver, July 22, 2026, s. 3.0, para. 2. On July 27 Justice Masuhara granted what it asked for: authority to borrow up to $4,571,000 instead of $250,000, and leave to sell a 20-foot container on the lot, bought for $95,000 plus GST, in which a company whose sole director is the debtors' principal claims an interest, per the Ancillary Order, July 27, 2026, paras. 3–4 and the Fourth Report of the Receiver, July 22, 2026, s. 4.0, paras. 1, 3, 6.

A presale book, and a stalking horse that could not close

The debtors' account of how they came to a receivership is in the affidavit of Daljit Thind, a director of 105 University View Homes Ltd., the nominee that holds title, sworn on November 7, 2024, the day before the receivership order. The respondents had by then paid approximately $26.1 million in development permit and associated municipal fees, he deposed, and a stage 1 building permit for excavation and shoring had issued on or about December 21, 2022. By his account, KingSett delivered a letter of intent and a construction commitment letter in 2022, and in November 2023 a KingSett representative assured him the lender would finance construction. On or about March 3, 2024, he says, KingSett told him it would not, "citing the petitioner's overall exposure to my company, Thind Properties Ltd." That decision, in his account, "forced the respondents to search for alternative joint venture partners resulting in the accrual of significant interest charges and the partial erosion of the respondents' equity in the Project," per the Affidavit of Daljit Thind, Nov. 7, 2024, paras. 4, 7–8.

KingSett's affiant, Daniel Pollack, deposed that the borrowers missed their monthly interest payment on May 1, 2024, had not responded to an August 30, 2024 demand for $84,633,896.19, and that KingSett "has lost confidence in the Borrowers' ability to satisfy their obligations and manage their business," per the Affidavit of Daniel Pollack, Oct. 9, 2024, paras. 15, 17–18, 25. On November 8, 2024, Justice Masuhara appointed KSV Restructuring Inc. as receiver under s. 243(1) of the Bankruptcy and Insolvency Act and s. 39 of the Law and Equity Act, per the Receivership Order, Nov. 8, 2024, p. 1. At the debtors' request, the court barred the receiver from marketing the property until January 18, 2025, so that they could try to refinance; they presented no viable refinancing or restructuring, the receiver reported on January 21, per the First Report of the Receiver, Jan. 21, 2025, s. 1.0, paras. 2–4. On January 30 the court gave KingSett judgment for $88,681,620.18 as of January 6, 2025, with interest afterward at RBC prime plus 7.04%, per the Judgment Order, Jan. 30, 2025, paras. 6–7.

The receiver calls KingSett the debtors' "largest, senior secured and likely fulcrum creditor," per the Fourth Report of the Receiver, July 22, 2026, s. 1.0, para. 3. Behind it, the receiver's first report lists four subordinated lenders whose loan it understands was originally $20.2 million, and unsecured creditors that the debtors' books put at approximately $11.7 million, $5,168,322 of it owed to Rennie entities, per the First Report of the Receiver, Jan. 21, 2025, s. 2.2.1, para. 4 and n. 2; s. 2.2.3, para. 1.

The first sale process was built around the presale contracts. On April 2, 2025, Justice Fitzpatrick approved it, and approved as its stalking horse the bid of 1419195 B.C. Ltd., a member of the Coquitlam-based BM Group of Companies: $86,000,000 for newly issued shares and units in the general partner and the partnership, in a reverse vesting structure, with a $3,000,000 deposit and a $1 million break fee, per the Sale Process Order, Apr. 2, 2025, paras. 3, 7–8 and the Second Report of the Receiver, Mar. 24, 2025, s. 5.0, paras. 1, 3–4; s. 5.1, para. 1. Since construction had not started, the receiver wrote, the contracts' December 31, 2027 outside date "will lapse before the District Project can be completed," and the stalking horse agreement required purchasers whose contracts carried $420,000,000 in sale prices, or $63,000,000 in deposits, to sign an addendum moving that date to December 31, 2030 and not to rescind, per the Second Report of the Receiver, Mar. 24, 2025, s. 4.1, paras. 1–2. Each purchaser's signed acknowledgement of the receiver's new disclosure statement opened a seven-day statutory rescission period, per the Notice to District Northwest Purchasers, Feb. 4, 2026, p. 1. Enough of them used it that the bidder's conditions "could not be satisfied on or before June 6, 2025," and the agreement was mutually terminated on May 30, 2025, with the deposit returned and no break fee owing, per the Third Report of the Receiver, June 18, 2025, s. 3.3, paras. 1–2.

Two hundred purchasers validly rescinded and have had their deposits returned, per the Fourth Report of the Receiver, July 22, 2026, s. 5.0, para. 1(d). The interest those deposits had earned belonged to the partnership under the contracts, in the receiver's view, and the court let it pass to KingSett, per the Third Report of the Receiver, June 18, 2025, s. 5.0, paras. 2–4 and the Interim Distribution & Ancillary Order, June 24, 2025, para. 3. Of $5,233,276 in accrued interest received, $3,798,418 went to KingSett and approximately $1.43 million was held back for professional fees and to repay earlier receiver's borrowings, per the Fourth Report of the Receiver, July 22, 2026, s. 3.2, paras. 1–2.

Eighteen months, and $4,160,000

On June 24, 2025, Justice Masuhara approved an amended process run by Jones Lang LaSalle Real Estate Services, Inc. as listing agent, for a 1% commission payable on a court-approved sale, with a bid deadline no later than six weeks from launch, per the Amended Sale Process Order, June 24, 2025, para. 3 and the Third Report of the Receiver, June 18, 2025, s. 4.2, para. 2; s. 4.4, para. 4(b). In its fourth update to purchasers, on February 4, 2026, the receiver said bidders could offer with or without assuming the presale contracts and the process "remains ongoing." The conditional extension of the outside date had not taken effect, because no sale closed by December 31, 2025, and each unrescinded contract "remains valid, binding and in full force and effect," with all deposits held in trust by Bennett Jones LLP, per the Notice to District Northwest Purchasers, Feb. 4, 2026, pp. 1–2.