Kooshie Cushions of Canada: a receiver's tender plan for 339 Willow Street

The building at 339 Willow Street in Truro sits on 2.07 acres zoned C4 commercial: 31,550 square feet in all, about 26,750 of them main-floor commercial space and about 4,800 second-floor offices, with surface parking, sprinklers, a passenger elevator, heat pumps and what the receiver's sale package lists as a new metal roof. Seven tenants, healthcare, community-service and retail operators among them, occupy it, and their rent is substantially all the revenue of the company that owns it: Kooshie Cushions of Canada Limited, incorporated in Nova Scotia on October 25, 2019 and wholly owned by Mark Shelley, per the First Report of the Receiver, Sept. 24, 2026, para. 2 and Apps. E–F, pp. 60, 72.

The building is the company's primary asset, and since July 3 it has been in the hands of Deloitte Restructuring Inc. as court-appointed receiver and manager. On September 24 Deloitte filed its First Report and a motion, set for 11:00 a.m. on October 2 before Justice John A. Keith of the Supreme Court of Nova Scotia in Bankruptcy and Insolvency, asking for approval of a sale process, of its activities, interim receipts and disbursements and fees, and of an increase in its borrowing limit from $50,000 to $500,000, per the Notice of Motion, Sept. 24, 2026, pp. 1–2. The first use the receiver gives for that money is a property tax bill it puts at approximately $325,000, per the First Report, Sept. 24, 2026, paras. 28, 32.

A loan, a demand, and an adviser the company would not sign on

Business Development Bank of Canada was the lender on the purchase. Its letter of offer of October 16, 2024 sets out the purchase of 339 Willow Street at $3,500,000, funded by a $2,500,000 BDC loan and a $1,000,000 vendor take-back. BDC's security is a $3,500,000 mortgage and an assignment of rents against the property, both signed January 10, 2025, a guarantee from Sun Kissed Energy Incorporated backed by a general security agreement, and a personal guarantee from Mr. Shelley for 10% of the loan outstanding when BDC demands on it, per the Affidavit of Marius Cassie, June 12, 2026, para. 6 and Ex. "A", pp. 8–9, 11. BDC's senior account manager in special accounts swore that the last mortgage payment was made on October 15, 2025. On April 7, 2026, BoyneClarke LLP, for BDC, demanded $2,565,282.75, owing as of April 2, with interest at 7.40%, and served a notice of intention to enforce security under s. 244(1) of the Bankruptcy and Insolvency Act, per the Affidavit of Marius Cassie, June 12, 2026, paras. 7–8 and Ex. "G", pp. 108–109.

BDC engaged Deloitte as its financial adviser on April 20. The engagement letter came with a consent for the company to sign, giving Deloitte unrestricted access to its records and recording that the company "will not object to the appointment of Deloitte Restructuring Inc. in any capacity," receiver among the capacities listed, per the Affidavit of James Foran, June 30, 2026, para. 5 and Ex. "A", pp. 6, 10–11. Mr. Shelley did not sign. "I have not signed the Deloitte engagement letter and will not be doing so. I understand Deloitte's mandate is with BDC, not with me," he wrote to BDC and Deloitte on April 22, per the Affidavit of Mark Shelley, June 23, 2026, Ex. "B". James Foran, a senior vice-president of Deloitte, swore that on a call that day Mr. Shelley told him he had a potential sale for the real property, that he was in the process of sending BDC a payment of $80,000, and that the company would not be co-operating with the consulting mandate, per the Affidavit of James Foran, June 30, 2026, para. 8.

BDC's letter appointing Deloitte private receiver and manager is dated April 24, and Deloitte accepted it on April 27. That morning Mr. Foran wrote that, with the company's cooperation, Deloitte intended to change the locks that day and direct the tenants to pay their arrears and future rent to it, and asked Mr. Shelley to confirm that the company would cooperate. "No consent given," Mr. Shelley replied, per the Affidavit of Marius Cassie, June 12, 2026, paras. 10–11 and Exs. "H" and "I", pp. 112–113, 116. By June 30, Mr. Foran deposed, the lack of co-operation had confined Deloitte's work as private receiver to preparing and filing the statutory notices, per the Affidavit of James Foran, June 30, 2026, para. 14. The First Report says the company's continued limited cooperation after the private appointment "ultimately resulted in the commencement of these receivership proceedings," per the First Report, Sept. 24, 2026, paras. 4–5.

The contest over who would be receiver

BDC applied on June 15 for an order appointing Deloitte receiver and manager under s. 243 of the BIA and s. 43(9) of Nova Scotia's Judicature Act, returnable July 3, per the Notice of Application in Chambers, June 15, 2026, p. 1 and p. 3. The company contested it, and Mr. Shelley, its principal, an officer and a director, swore on June 23 that the April 7 demand package had defects: one demand put interest at 7.40% a year and another at 6.55%, and the demand meant for the company was addressed to him personally. The company's lawyers at the time wrote to BDC's counsel on May 6 asking for clarification and a statement of account, and BDC, he swore, "did not provide meaningful clarification before advancing this application," per the Affidavit of Mark Shelley, June 23, 2026, paras. 1, 7–8, 11–12, 14. BDC's counsel had answered on May 19 that the notice to the company carried the correct rate, that the rate in the letter to Mr. Shelley as guarantor was incorrect, and that this "would not in any way render the ten-day notice period deficient," per the Affidavit of Joshua J. Santimaw, June 15, 2026, Ex. "D", p. 19.

Mr. Shelley swore that Kooshie had paid BDC $80,000 in April, "in good faith"; that it had identified "a possible sublease solution to replace the departed anchor tenant space"; and that it had made arrangements with the Town of Truro to catch up on its outstanding property taxes by monthly payments. "The arrangement will be confirmed upon leasing of the anchor tenant space," he added, per the Affidavit of Mark Shelley, June 23, 2026, paras. 16, 18–19. Mr. Foran deposed, on information from BDC, that no payment had been received after one on April 22 and that the default remained uncured as of June 30, per the Affidavit of James Foran, June 30, 2026, para. 15. Much of his affidavit is about the receiver. "In my view, the appointment of Deloitte is not appropriate because Deloitte is the creditor's chosen professional," he swore, and he asked the court to dismiss or adjourn the application or, failing that, to appoint a different, neutral receiver or impose narrower terms, per the Affidavit of Mark Shelley, June 23, 2026, paras. 23, 34.

BDC's reply of June 30 said that when a debtor is in default a secured creditor may first appoint a financial adviser for a "look see" into the debtor's finances, then choose between a private appointment and a court one, and that "It is the secured creditor under either scenario that would choose the receiver." Once the court appoints it, the reply said, the receiver "is not an agent of the secured creditor but the 'eyes and ears' of the Court," and the company's evidence was "only a plea for more time, nothing more," per the Reply Written Submission of the Applicant, June 30, 2026, paras. 3–4, 7–8.