Hedge Road: Ducimus sets the floor at $23.3 million

The trades are going back to Hedge Road Landing. Since the initial order, BDO Canada Limited has worked with the construction manager and the president of the builder, 2055226 Ontario Inc., to bring them back to finish partly built Phase 1 houses already sold under agreements of purchase and sale, and the monitor reports that "this process has taken some time but trades are returning to the site," per the Third Report of the Monitor, Sept. 22, 2026, para. 15.

The same report, dated September 22, carries the larger news. On September 21 the monitor, signing for every debtor, entered into a share subscription and asset purchase agreement with Ducimus Capital Inc. at $23,300,000 — $12,300,000 allocated to Phase 1 and $10,000,000 to the vacant Phases 2 and 3 — to serve as the stalking horse in a sale process BDO now asks the court to approve, per the Third Report of the Monitor, Sept. 22, 2026, paras. 6(c), 38(a)–(d). When this case was reported here on August 24, the form of the initial order was still in dispute and the court had not ruled; what follows is what the court has made of it since.

"In substance, it resembles most closely a court-appointed receivership"

Justice Dunphy granted the initial order on August 24 and opened his endorsement with the characterization that frames everything since: "This is in form a creditor-sponsored CCAA application. In substance, it resembles most closely a court-appointed receivership of a real estate development." Much of the Day 1 relief, he wrote, looks "something of a stretch" through a CCAA lens and "quite ordinary, matter of course" through a receivership one; form tells a court what it can do, substance what it ought to, and the substance satisfied him, per the Endorsement of Justice Dunphy, Aug. 24, 2026, para. 1. In round numbers, the endorsement puts the project's secured debt at just under $50 million, identified lien claims at about $6 million, the Canada Revenue Agency at about $1 million and other unsecured claims at about $10 million, per the Endorsement of Justice Dunphy, Aug. 24, 2026, para. 3.

The enhanced powers, he explained, exist because of the co-owners' internal decision rules: the monitor "is authorized to step in but is not required to do so," borrowing a receiver's authority "to be used as and when needed," per the Endorsement of Justice Dunphy, Aug. 24, 2026, para. 6. The court said it was not concerned with the syndicate's own decision-making — "a matter of internal management" among the beneficial owners of the debt MarshallZehr administers — and, of the director's proposed clarifications on how the monitor would use its discretion, found it neither necessary nor desirable to micromanage how the monitor consults, while repeating what he had said in court about its general obligation to consult broadly: "The Monitor's door is open to all but the Monitor is beholden to none," per the Endorsement of Justice Dunphy, Aug. 24, 2026, paras. 4, 7. If real rather than hypothetical disputes arise, the court can be consulted. The one change the judge made to the clean order answered a comment he says he makes often: the Commercial List's practice of making every order nunc pro tunc from midnight is not necessary on a routine basis, per the Endorsement of Justice Dunphy, Aug. 24, 2026, para. 9.

The order as issued carries the $325,000 directors' charge, the $500,000 administration charge and an $800,000 initial DIP limit, and it requires the monitor and both sets of counsel to allocate their fees, and the monitor its DIP advances, between Phase 1, Phases 2 and 3 and unallocated costs, per the Initial Order, Aug. 24, 2026, paras. 21, 32–33.

The comeback: ten houses and an over-the-counter vesting order

Four days later the court granted the amended and restated initial order: stay to November 13, 2026, administration charge up to $650,000, DIP borrowings up to $2,000,000, and a directors' charge raised to $450,000, ranking third behind the other two, per the Amended and Restated Initial Order, Aug. 28, 2026, paras. 17, 45. The monitor had sized the larger charge to the most HST it expects to collect in any one monthly remittance period, since the builder has no employees and post-filing HST is the directors' main exposure, per the First Report of the Monitor, Aug. 27, 2026, paras. 40–42 and the Factum of the Applicant, Aug. 27, 2026, para. 22. The enhanced powers were widened to include changing locks, disclaiming agreements, settling litigation and seeking vesting and sealing orders in the debtors' names, per the Amended and Restated Initial Order, Aug. 28, 2026, para. 29.

The Unit Sales Order, made the same day, is the practical instrument. It lets the monitor direct the builder to close any Phase 1 unit already under an agreement of purchase and sale for no more than $1,100,000 excluding HST and extras without returning to court, and it approves a form of vesting order that Norton Rose presents to the Commercial List registrar with a monitor's certificate and a price-redacted copy of the agreement; the registrar is directed to sign it, per the Unit Sales Order, Aug. 28, 2026, paras. 2–5. The First Report names ten lots, all under the threshold, per the First Report of the Monitor, Aug. 27, 2026, paras. 14, 21.

Before recommending it, the monitor obtained a broker's opinion suggesting the homes could fetch roughly 5% to 10% more if relisted in stages over six to twelve months. BDO concluded that carrying costs, the stigma of the proceeding and the cost and litigation risk of disclaiming the existing agreements did not suggest "any material additional value is likely to be attained," and noted that without the closings the debtors could not fund themselves through the stay, per the First Report of the Monitor, Aug. 27, 2026, paras. 18–19. The opinion and the agreements themselves are sealed until every Phase 1 sale closes, per the Unit Sales Order, Aug. 28, 2026, para. 6. The amended 13-week forecast has the ten closings bringing in $7,212,622 including HST, with the estate running about $571,000 negative through week 11 before the last closings land, per the First Report of the Monitor, Aug. 27, 2026, para. 29.

The lien claimants get a bar date

The endorsement anticipated the next step. "I am aware that there are lien claimants who will have a keen interest on how their interests are to be protected," Justice Dunphy wrote, noting the monitor meant to address them at the next hearing, per the Endorsement of Justice Dunphy, Aug. 24, 2026, para. 8.