Eglinton Fuels: a receiver now, the misspelled amalgamation later

On October 20, 2026, Justice Sean Dunphy of the Ontario Superior Court of Justice (Commercial List) appointed BDO Canada Limited receiver of all the assets, undertakings and properties of 17447124 Canada Inc., 17919310 Canada Inc. and Eglinton Fuels Inc. acquired for, or used in relation to, a business they carried on, on the application of Bank of Montreal under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act, per the Appointment Order, Oct. 20, 2026, p. 1 and para. 2. The three companies own and formerly operated an Ultramar gas station at 2610 Eglinton Avenue East in Toronto, according to BMO's factum, which puts what the borrower owed the bank at $5,624,393.47 as of September 16, plus accruing interest and costs, per the BMO factum, Oct. 16, 2026, paras. 2, 4, 9. The application was heard by Zoom, and the order records "no one appearing for the Debtors although duly served," per the Appointment Order, Oct. 20, 2026, pp. 1–2.

"This is a straightforward application for a court appointed receiver," the endorsement begins. "While there are a few loose ends to the file that may require greater scrutiny in future, the Bank's case for the appointment of a receiver is a strong one and I have granted the order requested." One loose end is a misspelled company name in the papers meant to bring the station's land under the bank's security; the other is a Mareva injunction Justice Cavanagh had recently issued, "the impact of which on this proceeding is quite unclear." Part of BMO's case was its allegation, in the factum's words, that "it appears that the Debtors and their principal were part of an approximately $1.32 million cheque kiting scheme, and that the Debtors have abandoned their operating business." Justice Dunphy called these "serious allegations of fraudulent behaviour by the debtor" and wrote that they "have not yet been proved, but their apparent merit at least raises the level of concern associated with this enforcement proceeding to the level of satisfying more easily the just and convenient test," per the Endorsement of Justice Dunphy, Oct. 20, 2026, paras. 1–2, 4–5 and the BMO factum, Oct. 16, 2026, para. 3.

A share purchase, financed by the bank

Per BMO's affidavit, sworn on October 15 by a senior account manager in the bank's Special Accounts Management Unit, the companies' sole director agreed in late 2025, through 174 Canada, to buy all the shares of Eglinton Fuels, the registered owner of the land. Principally to finance that purchase, BMO made three facilities totalling $4,687,000 available to 174 Canada under a letter of agreement dated December 18, 2025: a $4,517,000 real estate acquisition loan, a $40,000 corporate Mastercard and a $130,000 overdraft, all repayable on demand, per the Application Record, Oct. 16, 2026, Tab 2 (BMO affidavit), paras. 1, 4, 18–19, 21. The letter gives the real estate facility's purpose as "Acquisition Financing of gas station located at 2610 Eglinton Avenue East, Toronto, Ontario," at prime plus 1.75%, per the Application Record, Oct. 16, 2026, Tab 2, Ex. "F", p. 65.

For security the bank took general security agreements from 174 Canada and Eglinton Fuels, both dated January 2026, a first-ranking $4,687,000 charge on the land registered February 25, 2026, a general assignment of leases and rents, and the sole director's personal guarantee of the full amount of the facilities, per the Application Record, Oct. 16, 2026, Tab 2 (BMO affidavit), paras. 17, 23–24. A PPSA search against the companies discloses no other creditor. The parcel register shows a $1,000,000 charge registered on February 26, 2026 in favour of the individual who sold the shares of Eglinton Fuels, whom BMO's factum calls "the only other secured creditor of the Debtors," per the Application Record, Oct. 16, 2026, Tab 2 (BMO affidavit), paras. 28–29 and Ex. "C", p. 54 and the BMO factum, Oct. 16, 2026, para. 21.

The affidavit's table of the $5,624,393.47, exclusive of legal fees and continuing interest, puts $4,461,100.93 on the real estate loan and the rest on the overdraft facility, the Mastercard, overdrafts in two numbered accounts and fees, per the Application Record, Oct. 16, 2026, Tab 2 (BMO affidavit), para. 22. The demand letter BMO's lawyers sent on September 16 says that "as a result of irregular transactions in the Borrower's accounts (the depositing of multiple cheques which were returned NSF), the Borrower is indebted to the Bank in the additional sum of $534,540.29 in respect of those transactions," per the Application Record, Oct. 16, 2026, Tab 2, Ex. "Z", p. 247.

The second "g"

When the loan closed, 174 Canada did not own the land; Eglinton Fuels did, and BMO's factum says it still does. The financing required the two companies to amalgamate after closing, and counsel for 174 Canada gave an undertaking to complete it: Eglinton Fuels would continue federally as 17919310 Canada Inc., which would then amalgamate with 174 Canada, with 174 Canada as the continuing entity, per the BMO factum, Oct. 16, 2026, para. 13. The articles of continuance of 17919310 Canada Inc. give the previous name as "Eglington Fuels Inc.," per the Application Record, Oct. 16, 2026, Tab 2, Ex. "E", pp. 59–60. BMO's affidavit says the companies' counsel made a typographical error and has filed a Request for Correction with Corporations Canada, and that as of October 15 the error had not been corrected. "It is for that reason," it says, that all three companies are respondents and the bank sought a receiver over each, per the Application Record, Oct. 16, 2026, Tab 2 (BMO affidavit), paras. 15–16.

BMO's factum argued that even if the "Amalgamation Issue" left the bank no contractual right to a receiver over Eglinton Fuels or 17919310 Canada Inc., an appointment was still just or convenient under s. 101 of the Courts of Justice Act, because the bank and the companies shared "a clear and consistent commercial intention that the Bank would have the right to appoint a receiver over the Debtors." The bank submitted "that equity and commercial common sense support giving effect to that understanding, notwithstanding a clerical defect in the amalgamation documentation," per the BMO factum, Oct. 16, 2026, paras. 42–43.

Justice Dunphy's endorsement describes the same problem. In its telling, the bank wished to receive security over land owned by an affiliate of the borrower, and the two were to amalgamate. "Unfortunately, the debtor misspelled the name of the amalgamating corporation in a rather obvious way (adding a second 'g' to the word 'Eglinton') that has the plaintiff concerned about the status of its security over the land." The endorsement goes on: "This is not the stage of the process to get distracted by such issues," and "There is no doubt at present that the security was taken and registered and the contract called for this to happen." Then: "From the current vantage point, the Bank clearly has some security interest upon the land – whether there is a fatal defect or whether another has a better or superior claim will be matters to be explored later," per the Endorsement of Justice Dunphy, Oct. 20, 2026, paras. 2–3.

The cheques, as BMO tells them

Before August 28, BMO's affiant says, the accounts of the companies and a related company showed this: "While account balances were often modest and, in some instances, overdrawn, the records show a consistent pattern of apparently routine business transactions, with only limited atypical activity identified before the end of August 2026," per the Application Record, Oct. 16, 2026, Tab 2 (BMO affidavit), paras. 30–33.