Groupe Finstar: the credit bids, the park lot and the $10,000 sanction

Over four months and two phases, the sale process for Groupe Finstar's real estate drew more than 220 prospective bidders into its data room. By the court's count there were 152 confidentiality agreements, 14 building visits, more than 700 documented interactions with the receiver, two binding bids for the whole portfolio and 28 for individual buildings. The parties came very close to a deal for everything, Justice Luc Morin of the Superior Court of Québec wrote on October 9, 2026, as the "palpable disappointment" of Ayman Chaaban, who testified for the receiver, confirmed [translation]. Yet no scenario made it possible to contemplate repaying in full the secured creditors holding valid security on Finstar's assets, the judge found. "This reality explains why the Transactions presented to the Court [on October 8] almost all take the form of a credit bid by the secured creditors in respect of the given buildings" [translation], per the Judgment, Oct. 9, 2026, paras. 26–28, 37.1.

When the case was last reported here, on June 9, Morin J. had refused to continue the receivership under the CCAA and had approved one sale process for all of the group's projects. The October 9 judgment approves 15 transactions, "for the most part" in favour of secured creditors who credit bid, signs their vesting orders, and approves an interim distribution of about $80 million to the secured creditors and toward the fees of the receiver, Raymond Chabot Inc., and its counsel. It rejects the reading of the creditors' cost-sharing protocol put forward by Carl Dumont, the lender who sought the receiver's appointment, refuses the receiver's agreed transfer of a lot to the Ville de Sainte-Agathe-des-Monts for no consideration over Dumont's objection, and orders Dumont to pay $10,000 for a contestation served on the eve of the September 30 hearing, per the Judgment, paras. 1, 7, 16, 148–152.

At that September 30 hearing the court had granted the receiver's requests to extend the stay of proceedings to December 16, 2026, raise the administration charge to $3 million and admit late claims from CIBC and Cuisine Idéale, per the Judgment, paras. 1.4–1.5, 4. The rest was continued to October 8, for one day at most, per the Rectifying Judgment, Sept. 30, 2026, para. 6.

A CCAA test for a receivership sale

A receivership, unlike a CCAA case or a BIA proposal, has no statutory list of criteria for approving a sale outside the ordinary course, the judge noted. The judgment recalls the Supreme Court's reading, in Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41, that s. 243(1)(c) of the BIA lets the court do not only what "justice dictates" but also what "practical considerations require" [translation]. The criteria of s. 36(3) of the CCAA and s. 65.13(4) of the BIA, Morin J. held, "unless there are valid reasons to depart from them, must serve as a guide" for such a sale in a receivership [translation], per the Judgment, paras. 20–24.

The appointment of a receiver, the judge wrote, is generally little concerned with keeping operations going, and "Finstar had a handful of employees and was a real estate holding company with very limited operations"; the structured process had avoided "a disorganized realization with the inevitable litigation flowing from it" [translation]. The first-ranking secured creditors on each building supported the receiver, the judgment notes, and no other stakeholders needed the court's attention in a process meant to sell a real estate portfolio. On price, "it is hard to find more eloquent evidence of reasonableness in the consideration offered than a creditor who must resign itself to making a credit bid after a SISP conducted so meticulously and who supports the Receiver's application to have such a transaction approved" [translation], per the Judgment, paras. 37.3–37.6. To the secured creditors who called the ending "une fin en queue de poisson," a fizzle, the judge answered in English that "Hindsight is always 20/20"; the only other path was "a disorganized realization in silos" and "the race to the front of the proverbial line" [translation], per the Judgment, paras. 29, 33, 35.

What the vesting orders carry

Chalets Wow Lac-des-Sables Inc. takes the Auberge at 230 rue Saint-Venant in Sainte-Agathe-des-Monts and, "in accordance with the bidder's offer," its contracts with suppliers, service providers and subcontractors, the contracts of the employees assigned to running it, and the contracts for its domain names, websites, social media accounts and booking platforms [translation], per the Approval and Vesting Order (Chalets Wow), para. 20, Schs. A, D. The buildings at 135 and 235 Alouette go to La Financière Transcapitale inc., per the Approval and Vesting Order (Transcapitale), Sch. A; fourteen properties across the Tour du Lac, Beauregard Résidentiel 2, Russo, Alouette and Félix Leclerc projects go to Le Groupe Dakar inc. and Insta Capital inc., per the Approval and Vesting Order (Dakar and Insta), Sch. A. Several other buyers are individuals.

In the Transcapitale order, as in the others read for this piece, the purchase agreement stays sealed until the receiver's certificate is filed, and the order recites "the measures put in place by the Receiver to be able to close the Transaction despite the Dumont Contestation" [translation], per the Approval and Vesting Order (Transcapitale), Oct. 9, 2026, paras. 10, 15, 32. The judgment seals seven annexes of the receiver's third report, among them the transactions summary and Annex M, the distribution by asset, and the exhibit it cites for Dumont's credit bids, per the Judgment, nn. 3, 25, para. 153 and the Interim Distribution Order, Oct. 9, 2026, recitals.

A lot promised for parkland

The Ville had submitted three proofs of claim, each disallowed by the receiver and each appealed, before the two agreed that the receiver would transfer lot 6 629 197 to the Ville for no consideration. The receiver's counsel had called the Ville's position one "bordering on abuse"; at the hearing the receiver's lawyer ceded the lectern to the Ville's, "another sign of the Receiver's discomfort with this hot potato" [translation]. Dumont, the first-ranking secured creditor on the lot, objected to losing a value the parties put at about $100,000, per the Judgment, paras. 39–44.

The Ville relied on an agreement of October 21, 2024 in which Finstar undertook to cede the 2,533.8-square-metre lot free of charge as a contribution for parks, playgrounds or natural spaces, a condition, the Ville said, of its approval to subdivide land for Finstar's Projet Beauregard residential development. The draft notarial deed puts the consideration at "ZERO DOLLAR ($0.00)" [translation]. The Ville's counsel argued that the lot entered the public domain with a council resolution of October 22, 2024 and, under art. 916 of the Civil Code of Québec, cannot be transferred, ceded or sold, per the Judgment, paras. 45–47, 59, 61.

Morin J. called that "an incongruous position": the resolution was at best a promise to contract. Nor, the judge wrote, could a public body claim to place property in the public domain "in total disregard of the pre-existing charges" duly published in the land register, and part of Dumont's security on the lot was published before the resolution [translation]. No one disputed Finstar's undertaking, but it was never formalized, and an unpublished transfer is not opposable to third parties, the judgment notes, per the Judgment, paras. 48–51, 55. Asked whether the undertaking was a contract, a sale, a donation or a promise, the Ville's counsel rejected every option the court suggested, a hesitation the judge called "troubling" [translation]. The judge left the qualification "for another day" and held that the court could not cede the lot free of charge over its first-ranking secured creditor "on the basis of a personal undertaking of Finstar that is not registered in the land register" [translation], per the Judgment, paras. 57, 62, 67–68.