Jameson Broadway & Birch: Granville Street lenders ask out of the stay

Five parcels on Granville Street and West 13th Avenue in Vancouver are the security at the centre of the newest fight in this CCAA proceeding, and none of them lies under the tower the proceeding is about. In November 2021, Portage Capital Corporation agreed to lend $21,500,000 to bare trustees holding those properties for James Holdings Ltd., against a collateral second mortgage ranking behind Vancouver City Savings Credit Union, a $3,225,000 interest reserve and guarantees from James Holdings and from Anthony, John and Thomas Pappajohn, its directors. The interest was expected to come from the Granville buildings' rent after Vancity was paid, topped up from the reserve; the reserve was exhausted on August 1, 2023, and the loan's term ran out on January 1, 2025 without an extension, per the Affidavit #1 of Jeffrey Burt, July 24, 2026, paras. 16–19, 22.

The tower is 28 storeys and 258 rental units at the southeast corner of West Broadway and Birch Street, and its builders, 1061511 B.C. Ltd., Jameson Broadway & Birch General Partner Ltd. and Jameson Broadway & Birch Limited Partnership, obtained an initial order on November 25, 2025, with Alvarez & Marsal Canada Inc. as monitor. James Holdings owns 75% of the general partner and 74.9% of the partnership's units, and at filing was owed $12.5 million by the petitioners on a loan whose $9,008,748.91 of principal, the monitor reported, it had funded from the Portage facility and a separate facility from Argo Ventures Inc., per the First Report of the Monitor, Dec. 3, 2025, paras. 5.2, 5.5–5.6, 5.12, 5.18, 5.24. On December 4, 2025, the amended and restated initial order extended the stay to James Holdings as against three of its creditors, Portage among them.

Nine months later the Portage side wants out. CMLS Financial Ltd., which services the loan for Computershare Trust Company of Canada as custodian for funds managed by RBC Global Asset Management Inc., applied on July 27 to lift that stay. The petitioners sought an adjournment; on August 17 CMLS booked 30 minutes before Justice Coval for directions the next day, per the Requisition – General, Aug. 17, 2026, p. 1, and on August 24 it requisitioned a full day before Justice Brongers on September 8, per the Requisition – General, Aug. 24, 2026, p. 1. The reply sworn on September 2 is about one conversation before the filing, and whether anyone told the lenders the stay would not reach the Granville Street security.

A stay drawn around a holding company

Paragraph 13 of the amended and restated order bars any proceeding by Portage, Argo or British Columbia Housing Management Commission "against or in respect of James Holdings Ltd." without the written consent of the petitioners, James Holdings and the monitor, or leave; James Holdings must meanwhile carry on in the ordinary course and not dissipate its affected assets, per the Amended and Restated Initial Order, Dec. 4, 2025, paras. 13, 15. The monitor supported it because the controlling minds of the petitioners and James Holdings are identical, because James Holdings could not repay Portage, Argo or BC Housing, to which it is a covenantor on the construction loan, while the petitioners were not paying it, and because the stay reached those three creditors and no others, per the First Report of the Monitor, Dec. 3, 2025, paras. 5.28, 12.2–12.5.

At the time there was a buyer. The petitioners had an agreement of purchase and sale with FPB Holdings Group Inc. at $235,000,000, and on October 29 James Holdings directed that $16,482,090.68 be paid to Portage on a sale of the development, a condition, the monitor reported, of Portage keeping its facility available, per the First Report of the Monitor, Dec. 3, 2025, paras. 5.25, 5.53–5.54. FPB did not waive its financing condition, and the agreement was terminated on December 19, 2025, per the Second Report of the Monitor, Jan. 27, 2026, paras. 5.1–5.2. CMLS says the direction then ceased to act as security for the lenders, per the Notice of Application of CMLS Financial Ltd., July 27, 2026, Part 2, para. 32.

The stay's reach was in dispute well before July. Computershare served notices of intention to enforce under s. 244 of the Bankruptcy and Insolvency Act on December 24, 2025, and in an application response dated April 27, 2026 took the position that the stay did not restrain enforcement against James Holdings' assets unrelated to the development, which James Holdings and the petitioners disputed. The order as entered, it said, was "by inadvertence" not the draft negotiated between counsel, so "the terms of the JHL Stay of Proceedings are in dispute," per the Application Response of Computershare Trust Company of Canada, Apr. 27, 2026, Part 4, paras. 13–15. A forbearance agreement dated February 9 depended on court approval of a $35,000,000 mortgage over the Birch Street development in favour of Computershare and Argo, subordinate to the existing mortgages and court-ordered charges. The court dismissed that application on May 1, per the Fifth Report of the Monitor, July 24, 2026, paras. 1.4–1.5, and the forbearance agreement expired on July 31, per the Affidavit #2 of Jeffrey Burt, Aug. 28, 2026, para. 7(g).

What the lenders say the stay has cost

The application seeks leave for the Portage Lenders, the record's collective name for RBC Global Asset Management, Portage, CMLS and Computershare, to enforce against James Holdings' interest in the Granville properties and in two penthouses and a unit at 1477 West 15th Avenue added as collateral in 2024, per the Notice of Application of CMLS Financial Ltd., July 27, 2026, Part 1, para. 1(b); Part 2, paras. 11, 22. As of July 20, according to Jeffrey Burt, a director in CMLS's special servicing and loan workouts group, the borrowers owed $23,740,728.23 at 12% a year, of which $1,791,733.33 was arrears accrued since the first missed payment on December 1, 2025, growing by more than $215,000 a month. He also deposes that James Holdings claims to have received $1,827,523.73 from the August 2025 sale of a property whose net proceeds had been assigned to the lenders, as a creditor rather than as a partnership distribution, and that the money went to Mohel Holdings Ltd. under a direction dated August 19, 2025, per the Affidavit #1 of Jeffrey Burt, July 24, 2026, paras. 21(a), 27–28, 30, 37–38.

The legal argument starts from Yukon Zinc Corporation (Re), 2015 BCSC 1961, under which lifting a CCAA stay is discretionary and the applicant carries a "very heavy onus"; CMLS says the third parties in the cases where courts drew them into a stay had "a material role in the reorganization," and of this one, "This is not such a case," per the Notice of Application of CMLS Financial Ltd., July 27, 2026, Part 3, paras. 44, 48–49. James Holdings is "primarily an equity investor and, more recently, a creditor," in its account, "just seeking shelter under the Stay in the hope that it receives a limited partnership distribution from the Birch Property," per the Notice of Application of CMLS Financial Ltd., July 27, 2026, Part 3, para. 52. The notice also doubts a sale process that would take hotel bids while the rezoning was unapproved and BC Housing had not agreed to discharge its s. 219 covenant, and puts the added arrears at approximately $1,100,000 if the lenders stay bound to December 31, per the Notice of Application of CMLS Financial Ltd., July 27, 2026, Part 2, para. 3; Part 3, paras. 54–55.

CMLS also draws on the application of the senior lender, BC Housing, per the Notice of Application of CMLS Financial Ltd., July 27, 2026, Part 3, paras. 46, 55. BC Housing, which put its debt at $166,386,841.34 as of July 8, applied on July 23 for expanded monitor powers, including a power of sale, saying it had lost faith in the petitioners' ability to manage the restructuring after seven and a half months without firm financing commitments, per the Notice of Application of British Columbia Housing Management Commission, July 23, 2026, paras. 28, 32–33, 41.

The petitioners' answer, and July 28

Thomas Pappajohn's fifth affidavit, sworn July 23, makes the case for keeping the stay. Relying on it, James Holdings stopped paying Computershare $215,000 a month in interest after the filing; with the August 1 payment, $1,935,000 had gone unpaid. Because the petitioners' directors are also James Holdings' directors, enforcement would keep them from "deploying all their attention and resources to completing the Development and closing a transaction pursuant to the SISP," per the Affidavit #5 of Thomas James Pappajohn, July 23, 2026, para. 85. Loans secured ahead of the stayed creditors on James Holdings' other properties remain in good standing, and enforcement could trigger defaults under that security and leave James Holdings to consider "its own options for preserving value for stakeholders, including potentially through creditor protection measures." The proceedings and the sale process, he deposes, give the three stayed creditors "a realistic prospect of recovery" that lifting the stay would jeopardize, per the Affidavit #5 of Thomas James Pappajohn, July 23, 2026, paras. 78(e), 89–92.

CMLS's materials reached the service list unfiled at 10:38 a.m. on July 27 and filed at 4:09 p.m., the day before the hearing. In an eighth affidavit sworn July 28, Mr. Pappajohn asked for the adjournment: he had spent July 27 at Vancouver City Hall, where council approved the tower's rezoning application with six in favour, two abstaining and three absent, and the petitioners had not had the capacity to respond on what was in effect less than a business day's notice, per the Affidavit #8 of Thomas James Pappajohn, July 28, 2026, paras. 5–6, 11, 18–19.

That day Justice Masuhara extended the petitioners' stay to December 31, 2026 and raised the cap on Maynbridge Capital Inc.'s interim facility to $36,210,000, per the Stay Extension and Interim Financing Increase Order, July 28, 2026, paras. 2–3. He also approved a monitor-run sale process taking bids under the rental zoning or with 202 hotel units, which may or may not be conditional on the rezoning and the covenant's discharge; letters of intent are due October 15, final bids November 15, and the outside closing date is December 18, 2026, per the SISP Approval Order, July 28, 2026, Sch. B, recitals D–F, paras. 8–9.

The monitor's short supplemental report on the stay over James Holdings observes that the controlling minds remain identical; that the development still needs the petitioners for occupancy permits, deficiencies over the next 60 days or so and building management; that the sales agent will need information from them at the outset; and that at the October 15 deadline the monitor "will have a better indication on the potential distribution/waterfall to various stakeholders (including potential distribution to Portage and Argo, via James Holdings' unsecured claim) based on preliminary LOI values," per the Supplemental Report to Fifth Report of the Monitor, July 27, 2026, paras. 2.3–2.4.

A conversation before the filing

Thomas Pappajohn swore a ninth affidavit in opposition on August 19; both later filings refer to it, but it is not on the docket read for this piece. Mr. Burt's second affidavit, sworn August 28 after a call that day with Portage's managing partner, Andrew Jones, and representatives of RBC Global Asset Management, answers it point by point. The lenders expected the Granville rent surplus to service the loan, knew it would fall short, which is why the reserve existed, and afterward assumed the shortfall came from James Holdings' other real estate without knowing which. Before February 2026 they had seen no cash flows for any property but the Granville buildings, per the Affidavit #2 of Jeffrey Burt, Aug. 28, 2026, paras. 4, 6, 7(a)–(c).

Then paragraph 7(d), per the Affidavit #2 of Jeffrey Burt, Aug. 28, 2026, para. 7(d): "In Andrew Jones' discussions with one of the Pappajohn brothers prior to the commencement of the CCAA Proceedings, he was told that the Portage Lenders would not be captured by the Stay and that the Stay would just apply to the Birch Property." Those discussions, Mr. Burt says, caused the confusion over whether the lenders could enforce against the Granville properties. He adds that around March 2025 Thomas Pappajohn told Mr. Jones there was nothing for the lenders to do because James Holdings was only renewing its Vancity loans, and that the lenders would not have agreed to a new mortgage registered behind theirs. The Granville rent surplus, he says, "stopped being paid towards the Loan and were diverted." The lenders "are not creditors of the Birch Companies" and "should not continue to be prevented from enforcing against their Security while the Portage Lenders are effectively held hostage in this CCAA Proceeding," per the Affidavit #2 of Jeffrey Burt, Aug. 28, 2026, paras. 7(d)–(g), 8.

Anthony James Pappajohn, a director of the petitioners and of James Holdings, replied on September 2 in three pages. Among the brothers, he says, he was tasked with communicating with Mr. Jones, beginning around September 16, 2025, and his brothers have told him they did not speak to Mr. Jones or the lenders around the filing; the one other contact he knows of is a discussion between Thomas and Mr. Jones around July 15, 2026. He told Mr. Jones on or about November 25, 2025 that the petitioners would seek CCAA protection, and on or about December 2 that James Holdings could no longer pay interest on the Portage facility as a result. "I did not state to Andrew Jones that the Portage Lenders would not be captured by a stay in the CCAA proceedings." Such a statement, he says, would have been inconsistent with the petition, the initial order, the comeback notice of application and the amended and restated order, and "All of these documents identify a stay in relation to James Holdings," per the Affidavit #1 of Anthony James Pappajohn, Sept. 2, 2026, paras. 1–2, 5. He swears it in support of dismissing the application "to allow the Petitioners to advance these CCAA proceedings through the current critically sensitive stage," per the Affidavit #1 of Anthony James Pappajohn, Sept. 2, 2026, para. 6.

The application is set for September 8 before Justice Brongers, per the Requisition – General, Aug. 24, 2026, p. 1. Letters of intent are due October 15, and the petitioners' stay runs to December 31. BC Housing's application for expanded monitor powers was returnable on July 28; no order on it is in the record read for this piece.