Horizen Developments: 129 units never built, 10.7% for creditors

The plan for 520 Sarnia Road in London, Ontario, was an eight-storey building of 129 residential units, 106,361 square feet of gross building area on a site of about 1.677 acres, according to the affidavit that Andrew Charabin, principal of the lender ADJ Holdings Inc., swore to put the property into receivership, per the Affidavit of Andrew Charabin, Sept. 4, 2025, para. 7. Other than demolition, site preparation and planning, "no construction ever took place regarding this development," BDO Canada Limited reported as receiver, and the money for it had come by an indirect route: investors lent to the parent, RHH Rental Properties Ltd., on promissory notes, and the owner, Horizen Developments LP, guaranteed and secured those notes, per the First Report of the Receiver, Dec. 2, 2025, paras. 10, 13. Management told the receiver that when RHH made a voluntary assignment in bankruptcy on June 18, 2025, there were no funds left to develop the property, per the First Report, para. 14(a).

The lot has since been sold, the mortgage lender repaid, and the receiver has now counted what is left for everyone else. Its Second Report, dated September 3, 2026, sets proven unsecured claims at $14,548,394.59 against $1,550,927.65 available to pay them, a distribution of 10.7%, and asks the court to approve that payout and to discharge BDO once the last administrative tasks are done, per the Second Report of the Receiver, Sept. 3, 2026, paras. 4, 37–39, 47; App. "K". Most of the money owed traces back to RHH: six claims are from lenders holding Horizen's guarantee of RHH's notes, and the largest single claim is RHH's own.

A mortgage, a lien and a Mareva order

Horizen Developments GP Corp. is the sole general partner of Horizen Developments LP and holds title to the property for the partnership, whose units are held 45% by RHH, 45% by Futurelands Ltd. and 10% by AJDL Investments Inc., per the First Report, paras. 7–8. In May 2024 ADJ, a private mortgage lender and asset manager, advanced $5,000,000 under a commitment letter dated May 8: a $2,800,000 facility at 12% a year, compounded monthly, and a $2,200,000 facility for a flat fee of $175,000, which was repaid in December 2024. It took a $6,000,000 collateral mortgage on the land, a general security agreement, and guarantees from five companies, RHH among them, and two individuals, per the Affidavit of Andrew Charabin, Sept. 4, 2025, paras. 2, 9–11.

ADJ's ledger of the $28,000 monthly interest payments shows one returned NSF and resent in October 2024, and the same again in each of February, March, April and May 2025; the July and August 2025 payments came back and, as of August 28, had not been replaced, per the Affidavit of Andrew Charabin, Ex. "Q". By August 1, 2025, ADJ was owed $2,986,990.41 plus accruing interest and costs. Sierra General Contracting Inc. had registered a $190,392 construction lien on July 8, the tax certificate showed $157,461.52 in arrears as of August 29, and ADJ delivered its demand and notice of intention to enforce security on August 7, per the Affidavit of Andrew Charabin, paras. 8, 15–16, 21, 23.

On August 8, 2025, in a separate action in Guelph, Court File No. CV-25-00000342-0000, Justice Trimble granted an interim and interlocutory injunction restraining Horizen and various other related parties from dealing with their assets anywhere in the world, per the Affidavit of Andrew Charabin, para. 24. The plaintiffs in that action, individuals, companies and estates, fill most of the first two pages of the Mareva order, per the Affidavit of Andrew Charabin, Ex. "S". On August 19, a carve-out order made on the consent of ADJ and those plaintiffs authorized ADJ to apply for BDO's appointment, disapplied the Mareva order as against BDO as receiver, and let the plaintiffs carry on so long as their action did not interfere with the receivership, per the Affidavit of Andrew Charabin, para. 25. Justice Moore appointed BDO receiver on September 19, 2025, under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act, per the Second Report, para. 1.

Four offers by November 4

A realtor had listed the site in 2024, and although some parties expressed interest, no formal offer came, per the First Report, para. 16. CBRE Limited Brokerage put it on Realtor.ca on October 1, 2025, ran two advertisements in the planning journal Novae Res Urbis, and emailed about 2,000 planning and development contacts and about 1,900 real estate brokers. Nine prospective buyers signed confidentiality agreements; four submitted offers by November 4, per the First Report, paras. 19, 22. The receiver, in consultation with ADJ, chose 1423197 Ontario Inc. because it offered the highest consideration, had no diligence conditions and fit the receiver's closing timeline, and signed with it on November 12 against a 10% deposit, per the First Report, paras. 23–24. The unredacted agreement, a summary of the offers and two brokerage opinions of value went to the court as confidential appendices, and the receiver asked that they be sealed until closing because disclosure "would be highly prejudicial to any additional marketing efforts that may be required in the event that the proposed Transaction does not close," per the Factum of the Receiver, Dec. 3, 2025, paras. 36, 39(a).

Justice M.A. Cook approved the sale on December 5, 2025, with nobody appearing to oppose it and Sierra, as lien claimant, consenting. The endorsement found that the receiver had made appropriate efforts to market the property, that there was no evidence it had "acted improvidently," and that the process was "efficacious, fair and even handed," per the Endorsement of Justice Cook, Dec. 5, 2025, p. 2. The endorsement also paused on the accounts of the receiver's counsel. The invoicing and supporting documents in Reconstruct LLP's fee affidavit were "confusing and difficult to understand," the interest provisions on its invoices "appear to be inconsistent with s. 33(1) of the Solicitors' Act," and agency invoices from law firms "are not proper disbursements and should be claimed as legal fees," the court wrote, before approving the fees of both BDO and Reconstruct "as proportionate and reasonable in all of the circumstances," per the Endorsement of Justice Cook, pp. 2–3. The ancillary order made the same day fixed those fees at $52,410.53 and $16,067.53 and authorized the distribution to ADJ, per the Ancillary Order, Dec. 5, 2025, paras. 2, 6–7.