Leato Enterprise: one tenant left across two Queen Street West buildings

Leato Enterprise Ltd. owns two three-storey mixed-use retail and residential buildings on Queen Street West in Toronto, and in the receiver's notice to creditors those two buildings are the only assets listed, per the Notice and Statement of the Receiver, Sept. 2, 2026, para. 1. The company was incorporated on January 12, 2011, and Diana Choi has been its sole director and officer since that day. It bought 693 Queen Street West, between Bathurst and Tecumseth Streets, that April; 507 Queen Street West, between McDougall Lane and Augusta Avenue, followed in November 2018, per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 13–14, 21, 25 and Exs. "A", "C" and "F", pp. 39, 79, 94. The last rent rolls Leato gave its bank, as of May 1, 2025, showed two retail and two residential tenants at 507 with projected annual rent of $259,347, and one retail and two residential tenants at 693 with projected annual rent of $316,800, per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 22, 26.

By July 2026, Bank of Montreal had been told, through counsel then acting for Leato, that only one of the rental units across the two buildings was tenanted. The principal tenant at 693, Fly Toronto Corporation, under a lease expiring November 30, 2028, had moved out in or about February 2026 after a pipe leak and stopped paying rent. At 507, The Grand Fine Indian Dining, which leases the main floor and part of the basement, was paying $8,100 a month in place of approximately $11,500 under its lease, with Leato's agreement, per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 23, 27, 58. On August 24, 2026, Justice Dunphy of the Ontario Superior Court of Justice (Commercial List) appointed TDB Restructuring Limited receiver and manager of Leato's property on BMO's application under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act, court file CL-26-00000359-0000, after refusing an adjournment asked for by Ms. Choi and her co-guarantor of the company's debt, Andy To, who appeared without counsel, per the Endorsement of Justice Dunphy, Aug. 24, 2026, paras. 1–2, 5 and the Appointment Order, Aug. 24, 2026, para. 2.

A refinancing in 2024, a missed payment in June

Everything the record says about how the buildings reached this point is the bank's account, sworn on August 13 by Michaela Wolf, a senior account manager in BMO's Special Accounts Management Unit, and parts of it are stated as what BMO understands. The record read for this piece contains no evidence from the company.

BMO came in as a refinancing lender. A letter of agreement dated May 21, 2024 was amended and restated on October 22, 2024 to add a facility for 693, leaving two demand real estate facilities, $3,200,000 against 693 and $2,784,143.52 against 507, "for the purpose of refinancing existing indebtedness secured against the Real Property," per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 1, 4, 16–17. The security is a first-ranking charge of $2,800,000 on 507, registered May 23, 2024, and one of $3,200,000 on 693, registered November 1, 2024, each with a notice of assignment of rents; a general security agreement registered under the Personal Property Security Act (Ontario) on November 1, 2024; and a joint and several guarantee from Ms. Choi and Mr. To dated October 31, 2024, limited to $6,000,000 plus interest and costs. BMO is the only registered mortgagee on title to either building and the only secured party registered against Leato under the PPSA, per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 24, 28, 31, 33, 37.

Part of the 507 lot now belongs to Metrolinx, which registered a notice designating a transit corridor against it in December 2023. On January 17, 2025 the original property identifier was retired and divided in two, with Metrolinx the registered owner of the expropriated part and the parcel Leato kept subject to an easement in gross over a second part of the expropriation plan, per the Affidavit of Michaela Wolf, Aug. 13, 2026, para. 21 n. 1 and Ex. "C", p. 79.

The first missed payments fell due on June 2, 2026: $37,020.76 across the two loans, $8,840.76 of it principal and $28,180.00 interest. BMO wrote to the company and both guarantors on June 22 requiring a cure by June 29. None came, and management of the account moved that month to the special accounts unit, which "manages loans for customers that have a higher than acceptable level of risk," per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 40–44 and Ex. "N", p. 150. Property tax had gone unpaid too. As at June 26, 2026, arrears stood at $16,287.71 on 507, where the City of Toronto's records showed no payment since August 5, 2025, and at $20,315.58 on 693, where the last payment was $230.40 on May 6, 2026, per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 47–49.

On July 8, Miller Thomson LLP delivered BMO's formal demand, with a notice of intention to enforce security under s. 244 of the BIA and parallel demands on the two guarantors. The demand put the debt at $5,977,935.29 as at July 6: $3,108,133.30 on the 693 facility at 4.99%, $2,734,279.85 on the 507 facility at 6.17%, a line the letter labels "FRTL IRD Penalty" at $129,522.14, and $6,000 in administration fees, with interest accruing at $879.75 a day, per the Affidavit of Michaela Wolf, Aug. 13, 2026, para. 19 and Ex. "Q", p. 161. The parties tried to negotiate a forbearance and could not agree on terms. BMO "understands that Leato's attempts to pursue refinancing have been unsuccessful," and was unwilling to extend further credit. By August 13 the company was three months in arrears of principal and interest, and the debt had reached $6,019,192.79 plus fees, expenses and accruing interest, per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 9, 50–56.

According to the affidavit, BMO "also learned that Leato was depositing rental income into accounts at another financial institution in breach of the terms of the Credit Agreement," per the Affidavit of Michaela Wolf, Aug. 13, 2026, para. 59; the banking-services clause of that agreement requires the borrower to "maintain its Bank Accounts, solely with the BMO," per the Letter of Agreement, Oct. 22, 2024, Ex. "B" to the Affidavit of Michaela Wolf, p. 56. The rent reduction at 507, BMO's notice of application says, "was not approved by BMO," per the Notice of Application, Aug. 13, 2026, para. 22. Among Ms. Wolf's reasons for a court-appointed receiver, the bank says it has "limited visibility" into the state of insurance, the tenants and rent collections, and whether repairs are needed, and it has "lost confidence in Leato, its principal and their ability to properly manage the Real Property and repay the Indebtedness," per the Affidavit of Michaela Wolf, Aug. 13, 2026, paras. 60, 63.