King David (Cathedraltown lands): the stalking horse, after the winner walked

Some congregants of the Cathedral of the Transfiguration in Markham, Ontario park their cars on the land around it during mass. There were no agreements or documents about it, King David Inc.'s lawyer told the newly appointed receiver in January 2024, but his client wanted the receiver to be aware of it, per the Motion Record of the Respondents, Aug. 29, 2025, Tab 1A, p. 16. The land is four undeveloped parcels intended as Phases 2 and 3 of a residential condominium project, 14.02 acres on Avison Young's MLS listing, which offered a site "surrounding the iconic Cathedral of the Transfiguration," per the First Report of the Receiver, Aug. 8, 2025, paras. 9, 26(a) and the Supplement to the First Report, Sept. 2, 2025, App. "A", Sched. "A", p. 31. Before that listing went out, "Of particular concern was the obligation for any prospective purchaser to provide parking to the Cathedral," the receiver's answers to the debtor's written questions say, per the Receiver's Answers, Aug. 21, 2025, answer 14.

On July 10, 2026, Justice Myers of the Ontario Superior Court of Justice (Commercial List) approved the sale of the parcels to Home Trust Company, the senior secured lender, under an agreement of August 8, 2025 that had served as the stalking horse in the receiver's second sale process, per the Approval and Vesting Order, July 10, 2026, para. 1. The price is $30 million. Cash pays the City of Markham's property tax arrears, the receiver's and its counsel's remaining fees and $100,000 plus HST to the listing broker, Cushman and Wakefield Inc.; the balance is a credit bid against Home Trust's secured debt, $41,072,305.37 at March 31, 2026, per the Second Report of the Receiver, Apr. 10, 2026, paras. 3, 25, 29, 31. A bidder had offered $35,280,000 in that process, per the Second Report, App. "H", and then, in the judge's words, "walked away in its due diligence process." "The Receiver has considered the interests of all parties although there will be no recovery behind the first secured creditor. It tried – twice," he wrote, per the Endorsement of Justice Myers, July 10, 2026, paras. 1, 4.

Three forbearances

On or around December 1, 2021, First Source Financial Management Inc. completed a $54,000,000 first-mortgage loan to King David, an Ontario real estate developer, at the greater of 8.85% or CIBC prime plus 6.40% for 16 months and the greater of 18% or prime plus 15.55% after that. Helen Roman-Barber, an officer, director and shareholder of the borrower, guaranteed it. First Source held the "B" position and Home Trust the "A" position, per the Affidavit of David Mandel, Dec. 7, 2023, paras. 3, 6, 8–11, 14–15. Home Trust's priority share of the principal is $32,000,000, and the receiver understands that Home Trust terminated First Source as administrator in the fall of 2024. Behind the mortgage, and postponed to it, sat a $19 million charge in favour of the Slovak Greek Catholic Church Foundation on two of the parcels and a $7.5 million charge in favour of The Sovereign General Insurance Company, per the First Report, paras. 25–26.

The loan went into default in April 2023. Three forbearance agreements followed, each carrying the borrower's and guarantor's consent to a receiver if the loan was not repaid by the end of the forbearance period, per the Endorsement of Justice Steele, Dec. 21, 2023, para. 6. The company paid down $2 million of principal under the third, then missed the November 1 interest payment; First Source put the debt at $55,855,203.58 as of December 4, 2023, plus legal fees. "The Borrower has not articulated any plan to refinance or sell the Property," its affidavit said, per the Mandel affidavit, paras. 26, 32–35, 43, 46. On December 21, 2023, Justice Steele declined the respondents' request for an adjournment "given the three prior forbearances granted by the lender and the consent to the appointment of a receiver signed by the debtor." She appointed RSM Canada Limited receiver under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act, and granted judgment, but stayed both so that the respondents could pay the agreed $55,633,654.12 plus interest, per the Endorsement, paras. 2, 10, 14. The stay ran, on consent, to January 12, 2024, per the Endorsement of Justice Steele, Jan. 6, 2024, para. 1. The money was not paid, the order took effect, and on March 1, 2024 TDB Restructuring Limited was substituted for RSM, per the First Report, paras. 2, 17.

Avison Young, then a floor

The receiver's first broker, Avison Young, began marketing on June 7, 2024, with mailings, an e-brochure to about 3,200 parties, a Globe and Mail advertisement and an MLS listing. Avison Young received sixteen signed confidentiality agreements and, by the October 31 deadline, four offers, which the receiver found "highly conditional and not able to be accepted by the Receiver in their initial form." Of the two highest, invited to resubmit by January 30, 2025, one cut its price significantly and the other stayed highly conditional. Home Trust said it would not support either, and the listing expired on May 1, 2025, per the First Report, paras. 33–43. Avison Young, in the receiver's account, advised that a superior result could not be achieved under current market conditions, per the Receiver's Answers, answer 27.

The second attempt began with Home Trust's agreement of August 8, 2025: $30,000,000, paid in cash for taxes, the fees of the receiver and its counsel and other amounts ranking ahead of the secured debt, and by credit bid for the rest, with no break fee or expense reimbursement. It was meant, the receiver wrote, to "set a floor price for any sale transaction for the Lands, and, in the absence of higher or better offers, bring finality to the receivership, which has now endured for over 18 months," per the First Report, paras. 44, 48–49.

King David and Ms. Roman-Barber, represented by Ross Nasseri LLP, did not oppose. But Ms. Roman-Barber swore that the lands are "the second and third phases of Cathedraltown Piazza," draft plan approved: "They are undeveloped, but they are not vacant." Avison Young's process, she said, had been "very impersonal, indirect and untargeted," per the Affidavit of Helen Roman-Barber, Aug. 29, 2025, paras. 3, 11. The receiver did not agree, citing a Toronto development market that "has suffered a significant decline in recent years," per the Supplement to the First Report, para. 6. The respondents also filed an appraisal prepared for them by Element Real Property Advisors, its stated use "To assist with litigation proceedings pertaining to the Subject Property," valuing the lands at $80,600,000 as of March 21, 2025, per the Motion Record of the Respondents, Tab 2A, pp. 72, 76. Justice Steele approved the process, and the Home Trust agreement solely as the stalking horse bid, on September 11, 2025. The respondents, she noted, "although not opposing the motion, referred to the expert opinion they had obtained regarding a current valuation of the lands at issue. As noted by the Receiver, the testing of the market is a preferable means to assess value than hypothetical appraisals," per the Endorsement of Justice Steele, Sept. 11, 2025, paras. 2, 10–11. Her order sealed the first process's bids and the brokers' listing proposals, among other material, pending completion of the sale process or a further order, per the Endorsement, para. 12 and the Order, Sept. 11, 2025, paras. 4, 6, 8.