Kimberley Crossing: the build-out became a $7.5 million as-is sale

Kimberley Crossing was planned as 66 rental units in nine separately permitted buildings, labelled A-1 through C-3, on one parcel at 500 – 302 Avenue in Kimberley, B.C., owned by Peak Developments Corp. and Peak Developments Limited Partnership, both formed in Alberta in 2022, per the First Report, June 20, 2025, ss. 1, 3, 6. Peoples Trust Company's construction loan, under a commitment letter dated August 26, 2022, had a principal amount of $20,454,000, a 30-month term and a maturity date of June 1, 2025, and was insured by Canada Mortgage and Housing Corporation, according to Peoples' Petition, May 2, 2025, Part 2, paras. 20–22.

By April 1, 2025, Peoples said, $17,153,910.36 was owing and the loan was in arrears. "The Project is overbudget and Peak Developments has no money to either complete the Project or to keep the site secure," the petition says; nine claims of lien had been registered against the project between January 20 and April 9, 2025. That is the lender's account; none from the company is in the record read for this piece. "A reasonable scenario for recovery is a build out," the petition told the court, though that could only be determined "with an appraisal, a plan with a budget, and an assessment of the validity of the liens and payables," per the Petition, May 2, 2025, Part 2, paras. 29–32, 36.

On May 6, 2025, Mr. Justice Milman of the Supreme Court of British Columbia appointed D. Manning & Associates Inc. receiver and manager under s. 243(1) of the Bankruptcy and Insolvency Act and s. 39 of the Law and Equity Act, per the Receivership Order, May 6, 2025, para. 1. The receiver's Fourth and Final Report, dated September 29, 2026, records how it ended. Eight buildings are "at various stages of completion," and construction has not started on the ninth. The property sold as is for $7,500,000 and the sale closed on June 18, 2026; the receiver distributed $7,297,580.89 to Peoples and now proposes an application for its own discharge, per the Fourth Report, Sept. 29, 2026, ss. 1, 5, 10.

A stop-work order over the firestopping

The receiver's first report put the project at about 55% to 60% complete, averaged across the buildings, with C-2 and C-3, ten units each, at about 80%. The City of Kimberley's chief building inspector had stopped work in December 2024. That order "was issued due to long standing issues, and unresolved deficiencies, with the fire stopping work," and to rescind it the City required a third-party code consultant to inspect every building and inventory the firestopping at each penetration, with every deficiency then corrected to the inspector's satisfaction. The receiver retained Ethos Passive Fire Protection Consultants and Nor-West Firestop, and work began in the first week of June 2025. In C-2 and C-3 the deficiencies were "extensive, requiring the opening of all fire rated walls in both buildings," per the First Report, June 20, 2025, ss. 3, 6, 9.

Two trades that had done substantial work before the appointment, KulKon Construction Corp. and IKA Builders Inc., told the receiver they wanted to be "acceptable candidates for the completion of the project going forward." Both held liens, and both agreed to quote. The receiver had Tribus Project Management Ltd., its local project manager, prepare a baseline estimate against their quotations "to ensure that neither bid was inflated." It found Plan A, involving KulKon, and Plan B, involving IKA, "both too expensive"; Plan C had Tribus assembling a "coalition of willing subcontractors" to complete the project on the receiver's behalf, per the Fourth Report, Sept. 29, 2026, s. 3, items 14, 20–21, 24.

The City lifted the stop-work order on August 20, 2025, per the Fourth Report, Sept. 29, 2026, s. 3, item 26. Through Tribus, the receiver reconstructed the suites and common areas of C-2 and C-3, which by December, it wrote, "have been returned to substantially the same condition as when viewed on May 6, 2025," per its letter of Dec. 12, 2025, s. 3. It also connected the site to B.C. Hydro and installed garage doors, windows and cladding "to ensure that all buildings were weathertight." It identified four new deficiencies, among them fire-rated emergency egress doors "installed backwards" and drainage pipes whose exposed outfalls spilled water onto adjacent properties, and with Tribus recommended dropping Building C-1 altogether, having concluded that the site design did not allow for adequate on-site parking or efficient operation, per the Fourth Report, Sept. 29, 2026, s. 3, items 27–29, 32.

Advances ahead of the liens

The receiver paid for this by borrowing under Peoples' loan, and the receivership order ranked those advances "in full priority to all Respondents and all Claims of Builders' Lien, pursuant to s. 32(5) of the Builders' Lien Act." On the entered order the typed ceiling, $3,000,000, is struck through, and $1,000,000.00 is written in by hand above it, per the Receivership Order, May 6, 2025, para. 2(r). Peoples' later notice of application traces the climb: $2,000,000 on June 25, 2025, $3,900,000 on August 25, and $4,300,000 on December 18, per the Notice of Application, filed Jan. 23, 2026, Part 2, paras. 3–6.

KulKon opposed the August increase and asked for an adjournment and more information, including an "as-is" valuation. "Such delays, combined with escalating senior secured debt, will materially impair the residual value available to subordinate creditors, including KulKon and other creditors and lien claimants," it argued, per its Application Response, Aug. 25, 2025, Part 4, para. 19; Part 5, para. 3. Justice Milman made the $3,900,000 order on August 25, 2025, with counsel for KulKon listed as appearing, per the Order, Aug. 25, 2025, para. 2 and Sched. "A".

On December 5, 2025, the receiver was informed that Peoples "will not extend its financing towards completion of the Project," and it began planning a sale "on an 'as is / where is' basis." The $3,900,000 had been used. The receiver recommended raising the ceiling to $4,700,000, on a budget that included $84,500 for demobilization, and noted that its insurance had been "underwritten on the assurance that construction was proceeding at the Project site," so new policies would be needed for "now vacant buildings," per its letter of Dec. 12, 2025, ss. 5, 6, 11.

IKA opposed the further $400,000, and the priority of the $4,300,000 already advanced. The December decision, it said, was "a fundamental change in the purpose of the receivership financing," and the new money was "not directed toward completing the improvement." In IKA's reading, s. 32(6) of the Builders Lien Act requires proof that advances "will be applied to complete the improvement" and "will increase the value of the land and improvement at least equal to the amount advanced"; neither requirement was met, it submitted, and where the conditions are not met, "the Court has no jurisdiction to grant priority to further advances over builders' lien claims," citing Bank of Montreal v. Peri Formwork Systems Inc., 2012 BCCA 4, per its Application Response, filed Jan. 29, 2026, paras. 3, 11–12, 21–22, 25. Peoples cited the same decision for the point that such an order "is mandatory when the requirements of ss. 32(5) and (6) are met," per its Notice of Application, filed Jan. 23, 2026, Part 3, para. 19.