The land at 5528 Ferry Street in Niagara Falls was to carry three mid-rise buildings under the name Stanley District: a mixed-use building, a hotel and a residential building. La Pue International Inc., the single-purpose company that owned it, completed "significant shoring and excavation work," and no other phase of construction began, per the Tenth Report of the Receiver, July 17, 2026, s. 1.0, para. 2; s. 2.1, paras. 1, 3. In the receiver's summary of its cost consultant's findings, the work ran from November 2021 until it halted in February 2023, and the plans called for "a hole in the ground to the depths of between 8 to 9 metres," per the Ninth Report of the Receiver, Sept. 25, 2025, s. 3.2, para. 1(c)–(d). Before the receivership the company had pre-sold more than 350 condominium units and, as the receiver understood it, collected approximately $42.7 million in deposits, per the First Report of the Receiver, Dec. 13, 2023, s. 2.1, para. 1.
On July 24, 2026, Justice J. Dietrich signed the three orders that close the file out. On July 17 the purchaser of the land had taken an assignment of 362 of the buyers' agreements, per the Tenth Report, s. 3.5, paras. 1, 5. The orders terminate the remaining six, fix the statutory holdback under the Construction Act at $901,295, inclusive of HST, and discharge the receiver, AlixPartners Restructuring, Inc. (formerly KSV Restructuring Inc.), once it files a certificate that its remaining work is done. None of it was opposed, per the Endorsement of Justice Dietrich, July 24, 2026, paras. 1–4, 8. The receiver had also asked her to seal the suite numbers in the schedules to its deposit return protocols. She refused: "The units have not been built and the homebuyers do not live there (and never will)," per the Endorsement, July 24, 2026, para. 9.
A consent, and a buyer that kept missing deposits
The lender, MarshallZehr Group Inc., applied on June 7, 2023. Its application says its loan matured on April 1, 2023 and was not repaid, that MarshallZehr demanded $12,975,281.62 on May 4, and that five construction liens totalling $12,867,788 had been registered against the land between February and May 2023, liens the company, it alleged, had not disclosed to it, per the Application Record, June 7, 2023, Notice of Application, para. 2(j)–(l). When the order came, on October 19, 2023, it rested on the company's own consent: Justice Cavanagh found that La Pue had agreed in a settlement agreement to a receivership on default, and had breached it, per the Endorsement of Justice Cavanagh, Oct. 19, 2023, paras. 1–2.
On April 4, 2024 KSV signed with Lakeshore Luxe Design & Build Group, which assigned the deal on June 11 to 1000835091 Ontario Inc.; the court approved it on June 21, per the Tenth Report, s. 2.3, paras. 2–4. The purchaser paid neither its second deposit nor the balance, and on July 4, 2024 the receiver terminated; the first deposit was forfeited. A reinstatement a week later, with the price up $50,000, failed on unpaid deposits by the end of July. In September the receiver learned the purchaser was not registered with the Home Construction Regulatory Authority and so could not take on the buyers' agreements. A second reinstatement, on October 8, failed the same way, and the land was relisted. On November 18, with MarshallZehr offering to finance the balance and a further deposit in the trust account of the purchaser's lawyers, the receiver signed a third. The deposits now came to 18% of the price, and the purchaser would assume the buyers' agreements only if it obtained its HCRA licence within 90 days of closing, per the Endorsement, Jan. 7, 2025, paras. 10–15.
Pawel Fugiel, the company's sole officer and director, opposed the sale. He swore that he had made two offers, the second on November 2, 2024 at $20,500,000, and complained of "a substantial amount of pressure to produce proof of funds in a very short period of time." He also disputed MarshallZehr's interest: on principal of $12,375,000 the claim had reached $20,790,624.89 by December 18, 2024, including $7,915,624.89 of interest, and the rate had doubled in March 2023 from 13.75% to 27.50% "without any notice being given," per the Affidavit of Pawel Fugiel, Dec. 17, 2024, paras. 8–9, 39, 43, 48.
Justice Dietrich approved the sale on January 7, 2025. "That a firm commitment for financing from a purchaser in an insolvency proceeding should be expected is not a surprise," she wrote. The transaction's price was superior to Mr. Fugiel's offers, and she refused more time to redeem because "the Company is not coming with a cheque in hand to pay out all creditors." She recorded MarshallZehr's debt at approximately $20.9 million, including the receiver's borrowings, and authorized an interim distribution to it subject to a $1.4 million reserve against the liens, per the Endorsement, Jan. 7, 2025, paras. 9, 26, 28, 35–39.
On February 19, 2025, MacPherson J.A. held that La Pue had no appeal as of right under s. 193 of the BIA and refused leave, calling the motion judge's reasons "clear, comprehensive and, in my view, obviously correct," per Marshallzehr Group Inc. v. La Pue International Inc., 2025 ONCA 124, paras. 8, 11, 16–18. Two days later Justice Dietrich dismissed a renewed request to redeem as "an end run around the Approval and Vesting Order," per the Endorsement, Feb. 21, 2025, paras. 16, 18. The sale closed on March 19, 2025. The transaction documents had been redacted and sealed at approval, per the Endorsement, Jan. 7, 2025, paras. 28, 41; the price now appears in a note to the receiver's interim statement of receipts and disbursements: "The sale proceeds under the Transaction were $22,050,000; however, approximately $18.05 million was distributed by law firms directly to the secured creditors, and therefore is not reflected in this schedule," per the Tenth Report, s. 2.3, para. 8; App. "R", note 1.
Who stayed, and who got a cheque back
HCRA licensed the purchaser on May 27, 2025, a condition of assuming the unit agreements, and it later posted a Tarion bond. After closing, The Sovereign General Insurance Company, the deposit surety, authorized the original escrow agent, Sullivan Mahoney LLP, to transfer $36,960,815.30, exclusive of interest, representing the deposits held on active agreements, to Miller Thomson LLP as replacement escrow agent; the arrangements provided for Sovereign to be paid $500,000 from the deposits and accrued interest for its outstanding premiums and expenses, per the Tenth Report, s. 2.3, para. 9; s. 2.4, paras. 4–5; s. 3.5, para. 2. The receiver's final notice to buyers describes the purchaser as "an affiliate of Aura Developments," per the Notice to Home Buyers #11, July 17, 2026, p. 1.
Certain agreements carried an outside occupancy date of May 30, 2025; if the unit was not complete by then, the Tarion addendum gave the buyer 30 days to terminate and recover all monies paid, with interest under the Condominium Act, 1998. The purchaser told the receiver it did not intend to take any agreement with that date, per the Notice to Home Buyers #11, p. 1 and the Tenth Report, s. 2.5, para. 5. A first protocol, dated October 7, 2025, returned principal and interest to buyers who terminated in time. A second, effective June 1, 2026, let later requests through on the purchaser's consent, for principal without interest. A third, effective July 2, covered four buyers who ended their agreements by mutual consent, again for principal alone, per the Tenth Report, s. 2.5, para. 5; ss. 3.2–3.4.
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