Hedge Road: the fight over the form of the order

The last house at Hedge Road Landing closed on March 31, 2026. The builder — 2055226 Ontario Inc., a numbered company that spent a decade doing business as Jackson's Landing by the Lake — has not sold a new one since January 2025, and the site on the south shore of Lake Simcoe has been quiet since the spring: the first construction lien went on title on February 6, six more followed, and by April the trades had stopped work, per Affidavit of Alex Troop, sworn Aug. 17, 2026, para. 3(a) and Affidavit of Sean Atkinson, sworn Aug. 17, 2026, paras. 45, 81, and Exhibit B.

What the trades left is a development planned at 144 cottage-style bungalows with shared waterfront and a private clubhouse. As of July 15, 75 homes were completed and sold, 24 sat in various stages of construction — 23 already under agreements of purchase and sale — and 45 had not been started. Phases 2 and 3, vacant land intended for another 168 units, never got past early servicing, per Affidavit of Sean Atkinson, sworn Aug. 17, 2026, paras. 40–43, 46.

On August 18, MarshallZehr Group Inc. — the mortgage administrator owed $42.9 million across two matured facilities — was to appear before the Ontario Superior Court of Justice (Commercial List) for a creditor-led initial order under the CCAA over the builder, its three co-owner entities and a limited partnership. It did not get a hearing that day. Sam Reisman, a director of two respondents, had retained D.J. Miller of Thornton Grout Finnigan on the evening of August 16, and asked for ten days, per Aide Memoire of MarshallZehr, Aug. 18, 2026, paras. 2, 6. MarshallZehr said ten was not appropriate and offered two, per Aide Memoire of MarshallZehr, Aug. 18, 2026, paras. 6, 13. Justice Dunphy adjourned to August 24, directing the parties to narrow what separates them, per Affidavit of Samuel G. Reisman, sworn Aug. 22, 2026, para. 41.

Two mortgages, one administrator, and a vote

MarshallZehr is not lending its own money. It is an Ontario mortgage broker and administrator that syndicates construction financing, and it holds the Hedge Road charges for the participants who funded them, per Affidavit of Sean Atkinson, sworn Aug. 17, 2026, para. 19. The Phase 1 facility, MZGI 427, was committed in December 2021 for up to $48,553,000 and matured on January 1, 2026 after three extensions; the Phase 2 and 3 facility, MZGI 569, advanced $16,050,000 in July 2024 and matured on March 1, 2026. Each is secured first on its own phase and second on the other, ahead of a subordinated $5-million charge held by Rose Finance Corp., per Affidavit of Sean Atkinson, sworn Aug. 17, 2026, paras. 50–53, 58–59.

Demands and s. 244 notices went out on May 22, when the debt stood at $39,808,886.10. By August 13 it was $42,907,636.19, of which $22,745,236.38 sat on a Phase 2 and 3 loan whose principal was $16,050,000, per Affidavit of Sean Atkinson, sworn Aug. 17, 2026, paras. 82–83. Part of that growth is written into the loan: the Phase 2 borrower rate ran at 13.5% per annum until one month before maturity, when an adjustment term doubled it to 27%, per Affidavit of Samuel G. Reisman, sworn Aug. 22, 2026, para. 11.

Ducimus Capital Inc., a Halifax lender, advanced $14 million of the Phase 2 principal; the remaining $2.05 million came from Morrison Financial Mortgage Corporation, a position Reisman took over by assignment. He swears he acquired it on December 4, 2024; the transfer instruments MarshallZehr exhibits are dated April 30, 2026 and were registered on title on July 27, three weeks before the application, per Affidavit of Samuel G. Reisman, sworn Aug. 22, 2026, para. 7 and Affidavit of Sean Atkinson, sworn Aug. 17, 2026, para. 61.

Canvassing the syndicate on enforcement in June, MarshallZehr put the choice — receivership, creditor-led CCAA, power of sale, or other — to a vote in which each dollar of principal counted once: Ducimus 87.2%, Reisman 12.8%. By July 16 its Senior Vice President, Sean Atkinson, was telling Reisman that with Ducimus's vote the administrator had its majority and was "working to bring the project into a court proceeding to liquidate the security," per Motion Record of Ducimus Capital Inc., Aug. 24, 2026, Schedule B to Exhibit A of the Affidavit of Rosemarie Perruzza, sworn Aug. 23, 2026.

What the application asks for

The order MarshallZehr seeks is not the model order. BDO Canada Limited would be appointed monitor with Enhanced Powers: authority, where it considers it necessary or desirable and to the exclusion of everyone else, to manage the business, control all monies, contract in the respondents' names and take "any and all corporate governance actions" — including the Major Decisions that a Co-Owners Agreement dated November 20, 2014 reserves to the unanimous approval of the three co-owners, from budgets and house price lists to settling claims. That unanimity is what the powers are meant to solve: the proposed monitor's report states that timely decision-making on financing, budgets and dispositions cannot wait for all three owners to agree, per Pre-Filing Report of the Proposed Monitor, Aug. 16, 2026, paras. 56–59.

The money is modest against the debt: a revolving DIP facility of up to $2,000,000 from MarshallZehr at 12% with a 2% commitment fee, of which $800,000 would be authorized in the initial period, and a $500,000 administration charge securing the monitor, its counsel and the applicant's counsel, per Pre-Filing Report of the Proposed Monitor, Aug. 16, 2026, paras. 39–40, 44. The proposed monitor notes the DIP is cheaper than the 27% the incumbent facility charges, per Pre-Filing Report of the Proposed Monitor, Aug. 16, 2026, para. 42(f). Reisman's affidavit adds, in a footnote, that while MarshallZehr is styled the DIP lender, he understands the funding is being provided by Ducimus, per Affidavit of Samuel G. Reisman, sworn Aug. 22, 2026, para. 24, n. 1.

The 13-week forecast runs $1,391,503 net-negative through its first eleven weeks and turns positive only when houses close, the first four landing in week six, per Pre-Filing Report of the Proposed Monitor, Aug. 16, 2026, para. 34 and Appendix A. Alex Troop — president of 205 Ontario, of co-owner Alliance (Sutton) Inc., and of Alliance Homes Ltd., the construction manager — swore his own affidavit in support, describing purchaser complaints already before the Home Construction Regulatory Authority and some $600,000 of his own money advanced to finish four houses, "a drop in the bucket compared to what 205 really needs," per Affidavit of Alex Troop, sworn Aug. 17, 2026, paras. 3(c)–(f). Below the mortgages sit some $10.4 million of trade debt including the $5.7 million of registered liens, about $950,000 of HST, Tarion's security over purchaser deposits, and purchasers already suing for those deposits, per Affidavit of Sean Atkinson, sworn Aug. 17, 2026, paras. 63, 66–70.

A CCAA rather than a receivership keeps 205 Ontario alive as the licensed HCRA builder and vendor, with its construction manager and purchaser relationships intact — value a receiver would inherit cold, per Factum of the Applicant, Aug. 17, 2026, para. 6.

The respondent with five roles

Reisman answers in five capacities, three of which drive this fight: director and officer of 205 Ontario; president and sole director of the general partner of Rose Sutton Limited Partnership, one of the three equal co-owners; and participant in the Phase 2 mortgage, per Affidavit of Samuel G. Reisman, sworn Aug. 22, 2026, para. 1. He has been in the project more than twenty years and says he and the Rose entities put more than $12 million into it, per Affidavit of Samuel G. Reisman, sworn Aug. 22, 2026, para. 13.