Everhome: a DIP behind Meridian, and the receivership Meridian preferred

Everhome is four mid-rise condominium buildings at 9704 McCowan Road in Markham, with 131 residential units and one commercial unit, and its principal swore on October 13 that construction was approximately 86% complete, per the Affidavit of Shakeel Walji, Oct. 13, 2026, para. 1. The affidavit of the project's lender, Meridian Credit Union Limited, says agreements of purchase and sale had been signed for 103 of the units as of July 2026, and that work stopped in or around mid-May, when the structures were substantially complete, the building envelopes near completion and the interior works "incomplete and behind schedule." Meridian's affidavit attributes the halt to "reported safety concerns identified by the safety consultant, resignation of the construction manager, compounded by a funding gap and associated cost overruns." On May 20, the affidavit says, the construction manager, Grove Inc., sent the principal a safety inspection report "documenting the numerous serious safety deficiencies and non-compliance items onsite" and terminated its role in the same email, per the Affidavit of Amber Waheed, Oct. 7, 2026, paras. 33–35 (Application Record, Tab 2).

Meridian's application for a receiver was returnable on October 14, 2026, per the Affidavit of Shakeel Walji, Oct. 13, 2026, para. 5. At the hearing, Sher Markham Inc., the owner, and Sher Holdings Inc. asked Justice Sean Dunphy of the Ontario Superior Court of Justice (Commercial List) to adjourn the hearing for 30 days so they could work towards a CCAA application and a DIP facility. Justice Dunphy declined and signed the receivership order the same day, per the Endorsement of Justice Dunphy, Oct. 14, 2026, paras. 6, 10. It appoints Grant Thornton Limited receiver and manager of the property of both companies, including the McCowan Road lands, under s. 243(1) of the BIA and s. 101 of the Courts of Justice Act, and construction lien trustee under s. 68 of Ontario's Construction Act, per the Receivership Order, Oct. 14, 2026, paras. 2–3.

"Speaks volumes"

The endorsement opens by calling the facts "quite clear and effectively undisputed." Meridian, it says, had provided $57.7 million in financing towards the project and held first-ranking mortgage and general security; more than $11 million in lien claims had been filed "since work on the project effectively ground to a halt in May"; Meridian gave notice of default and a reservation of rights letter on April 27, 2026, delivered its demand and the required notices on August 5, and every deadline for repayment had passed without cure. "Neither the existence of the debt, its enforceability or its ranking have been questioned," Justice Dunphy wrote, per the Endorsement of Justice Dunphy, Oct. 14, 2026, paras. 1, 3–5.

The question, as the endorsement puts it, was "Is it just and equitable to appoint a receiver?" The case had been "painted as a contest between a viable CCAA process and receivership similar to the case of JBT Transport Inc. (Re), 2025 ONSC 1436," the judge wrote, but was "in reality far closer to my decision in RBC v. International Trucking Inc. 2026 ONSC 2978. There is no viable CCAA option, there is real risk to the security of Meridian in waiting further and nothing but speculative chances of delay producing more than a deeper hole to dig out of," per the Endorsement of Justice Dunphy, Oct. 14, 2026, paras. 6–7.

The reasons start with the length of the request. "The first clue is in the length of the delay requested: 30 days. A 'ready to roll' CCAA application takes no more than a few days to assemble assuming the pieces are in place." They were not in place, the judge wrote: more than $17 million was estimated to be needed to finish a project "which has very significant pre-sales in place," to say nothing of "the $11 million plus in accumulating liens," per the Endorsement of Justice Dunphy, Oct. 14, 2026, para. 8. The same paragraph then turns to the DIP:

There is a DIP term sheet which dangles the prospect of construction financing without priming Meridian. That is a VERY tempting proposition for a Credit Union in Meridian's position and the very fact that Meridian prefers to take its chances in a receivership now rather than later speaks volumes as to how viable that particular DIP proposal is.

The endorsement continues, per the Endorsement of Justice Dunphy, Oct. 14, 2026, paras. 8–9: "It is not my place to substitute my business judgement for that of Meridian." Meridian, in the judge's words, had "played by the rules and patiently." The judge described "a partly-completed project that I am quite confident Meridian would rather endure almost any reasonable level of risk to see someone else take charge of financing and completing," and concluded: "There is no viable CCAA prospect to consider nor is this a going concern business with significant goodwill at risk. This is a single-purpose borrower with a project that has been halted for almost six months. There is value to preserve, but not through the CCAA at this point." The order was signed "subject to small amendments," per the Endorsement of Justice Dunphy, Oct. 14, 2026, paras. 9–10.

The term sheet

The term sheet arrived the day before the hearing. Shakeel Walji, the principal and founder of both companies, swore that Safe Harbour Global Capital provided Sher Markham with an executed commitment letter on October 13, 2026 for DIP financing within a CCAA in the principal amount of $21,150,000, and that a copy went to Meridian and its counsel the same day, per the Affidavit of Shakeel Walji, Oct. 13, 2026, paras. 1, 9–10. The affidavit's case was that the proposed charge "does not seek to prime the amounts owing by the Debtors to Meridian," and that the 30-day adjournment "will not create any material prejudice to other stakeholders," per the Affidavit of Shakeel Walji, Oct. 13, 2026, para. 3.

The commitment paper itself, Exhibit A to that affidavit, names the lender as Safe Harbour Global Capital (2250505 Ontario Inc.). Its recitals contemplate a CCAA in which Sher Markham would complete construction, "convert the Project from a condominium development to a Purpose-Built Rental development," run a sale and investment solicitation process, and sell or refinance the project by way of a new first mortgage provided or insured by Canada Mortgage and Housing Corporation, including under its MLI Select program, or another sale or investment proposal. Interest would run at 12% a year, compounded monthly, capitalized and payable at maturity; a 5% commitment fee, $1,057,500, would be fully earned on the granting of the DIP approval order, per the Affidavit of Shakeel Walji, Oct. 13, 2026, Exhibit A, Recitals and ss. A(1), A(9)–(10).

On priority, the paper's charge would rank behind Meridian's first mortgage and an administration charge of up to $650,000, and ahead of all other security, "including those in favour of Genesis, Westmount, and any construction lien claimants, to the fullest extent permitted by the Court." The postponement to Meridian would be limited to the principal owing under its mortgage at the date of the initial order, approximately $56,065,000, with interest and reasonable enforcement costs, and would not extend to further Meridian advances without Safe Harbour's written consent. The table of uses allots $3,444,848 to construction draw 41 for January to June 2026; $1,719,389 to interest and costs "to bring Meridian Current"; $2,773,645.81 to a preliminary paydown of Genesis Mortgage Investment Corp.'s second mortgage and $174,853.78 to a second Genesis line for applicable interest; $750,000 to professional fees; $9,835,162.41 to construction completion and soft costs; and $2,452,101 to holdback. The Genesis paydown would be released when Genesis assigned its collateral security to Safe Harbour, per the Affidavit of Shakeel Walji, Oct. 13, 2026, Exhibit A, ss. A(7)–(8), A(17), C.