LJM Tower: the $19 million, and the power to ask where it went

LJM Tower is sixteen storeys of concrete at 2782 Barton Street East in Hamilton: 313 condominium units, 243 storage lockers and 311 parking spaces, begun in December 2016 and registered as Wentworth Standard Condominium Corporation No. 664 on May 22, 2025. Of its 301 pre-sale agreements, 258 closed, per the Fourth Affidavit of M. Ahsan, June 30, 2026, paras. 19–22. The escrow agent, Harris, Sheaffer LLP, collected approximately $100.9 million on those closings, including what purchasers paid toward property taxes and HST. It paid approximately $2.6 million to the City of Hamilton and approximately $79.2 million to DUCA Financial Services Credit Union Ltd., retiring the construction loan, and between August 5 and October 9, 2025 released the balance to the developer, LJM Developments (Hamilton) Inc.: $19,043,030.60, per the Third Report of the Monitor, July 7, 2026, paras. 25, 27–28.

On November 6, 2025, the company's chief financial officer, Muhammad Ahsan, wrote that "surplus funds have been utilized to address several critical obligations, including repayment of other group (lender's) liabilities, settlement of certain project trade payables, securing liens, payment of management fees, and related expenses. As of today, we do not have the necessary funds to meet our HST obligations." The message is quoted in the surety's evidence, per the Affidavit of Andrew Armstrong, Feb. 19, 2026, para. 32 (record p. 34). Five trades registered construction liens against the unsold units between November 6 and December 24, 2025, per the Pre-Filing Report of Schwartz Levitsky Feldman Inc., Feb. 9, 2026, para. 6.6.

A filing the surety learned about afterwards

On February 10, 2026, Justice Jana Steele granted the company an initial order under the CCAA, appointed Schwartz Levitsky Feldman Inc. as monitor and approved a $2.5 million interim facility from RCM Capital Syndication SPV III LP. Her endorsement gives the company's account: "because of recent downturns in the condominium market, several purchasers (approximately 43) failed to close on their units," and liens on the 55 unsold units left it "unable to convey title" to buyers, per the Endorsement of Steele J., Feb. 10, 2026, paras. 4, 15–16 and n. 3.

Westmount Guarantee Services Inc., agent for sureties led by Aviva Insurance Company of Canada, had provided a $6,260,000 bond in favour of Tarion and held a $30,000,000 mortgage still registered against the unsold units, per the Armstrong Affidavit, paras. 15, 17 and the Pre-Filing Report, paras. 6.3–6.4. Justice Steele's endorsement of the February 20 comeback hearing records that "the Applicant did not notify the Surety of these proceedings until after the Initial Order was sought," and that the two had been discussing "$19.1 million in Proceeds that the Applicant was left with after the repayment of its construction financing facility, which was not disclosed to the Court (or the Applicant's counsel, the Monitor or Monitor's counsel). The Applicant acknowledges that it erred in not disclosing the fact that it was engaged in discussions with the Surety in connection with the Proceeds," per the Endorsement of Steele J., Feb. 20, 2026, para. 8.

At the surety's request, the amended and restated initial order replaced SLF with KPMG Inc., which Aviva had engaged as financial adviser in or around late November 2025; the endorsement notes, from SLF's own report, that the change was not the result of any concern about SLF's independence or conduct. Aviva's facility replaced RCM's, per the Endorsement of Steele J., Feb. 20, 2026, paras. 1, 10–11. The order directed KPMG to report on the use of the proceeds released after the construction lender was paid, on the HST on the sold units, and on the construction holdbacks, per the Third Report, para. 6. According to the monitor's factum, on January 7, 2026 Mr. Ahsan had "expressly denied KPMG access to the Applicant's books and records and refused to provide any information," per the Factum of the Monitor, July 9, 2026, para. 10.

In April the company was authorized to draw the surety facility's full $2.5 million, and Justice Steele approved a process letting the company sell units without returning to court so long as each price met a sealed minimum, set a lien claims process and extended the stay to July 3, per the Endorsement of Steele J., April 9, 2026, paras. 4, 7, 13, 31, 46, 52. Justice W.D. Black extended it to July 10, per the Order (Extension of Stay), June 19, 2026, para. 2.

What the bank statements show

KPMG's Third Report reviews the company's bank activity from July 15 to November 10, 2025. With about $750,000 on hand at the start, the company paid out approximately $19.9 million. Its own summary of those uses totals $19,108,932. The monitor's reconstruction totals $19,888,346: $11,519,756 to related entities and persons, $5,299,756 to ICP Developers, $2,551,792 of project costs and $517,042 to Clifton Blake, a line the company's summary does not have, per the Third Report, paras. 27–29.

The company told the monitor that group companies and related individuals had advanced the equity the construction lender required, and that LJM Group entities "regularly move funds amongst themselves in the ordinary course of operations." The loans were not subject to loan agreements and had no security, and on the company's books stood at $11,126,064 on July 15, 2025, owed to six parties. The company characterizes its payments as repayment of those loans, the monitor says, "irrespective of whether the repayment was made to the same related party that advanced the corresponding Intercompany Loan," per the Third Report, paras. 31–33, 35, 38.

The monitor set the two lists side by side. LJM Developments (Cambridge), (Niagara Falls) and (Queenston), carried on the books at $2,485,000, $2,938,000 and $2,635,000, received nothing. Recipients with no loan on the books received, among other amounts, $2,500,000 (2202277 Ontario Inc.), $2,490,000 (2601939 Ontario Inc.), $1,500,000 (LJM Developments (Newmarket) Inc.), $1,500,000 (an individual related to the group), $800,000 (LJM Developments (Brantford) Inc.) and $96,835.84 (Liaquat Mian). LJM Developments (Grimsby) Inc., owed $1,008,420.94, received $2,605,000, including $550,000 that the company says was routed through a law firm to bond off two liens. The monitor's searches show Mr. Mian as an officer, current or former, of each recipient entity, and 2202277 Ontario Inc. as dissolved on December 29, 2025; none of the recipients had registered security, per the Third Report, paras. 39–42. Mr. Mian is the group's founder and chief executive and the company's president, per the Armstrong Affidavit, para. 20.

Asked on May 21 how the recipients used the money, "the Applicant has not provided a substantive response to the Monitor's requests, other than to reiterate that funds are regularly moved amongst the LJM Group." The monitor's view is that "certain of the transactions could constitute preferences and/or transfers at undervalue contrary to sections 95 and 96 of the Bankruptcy and Insolvency Act or otherwise constitute impugnable transfers," per the Third Report, paras. 44–45. The monitor has made no finding, and says it seeks its powers without "reaching any predetermined conclusion regarding the conduct of any person," per the Third Report, para. 71.

ICP Developers Inc., a related company, received $5,299,756.15 in the review period for what the company describes as development and construction management services, under no formal written agreement. Its invoices, issued between October 2019 and November 2024, total approximately $6,606,248.94 including HST. The construction lender had advanced financing against the budget lines for ICP's services; the company says the fees went unpaid at the time because the project needed more equity, and were paid once it believed no further draws were coming. The monitor cannot yet say whether earlier payments were made, per the Third Report, paras. 46–51. ICP, whose sole director and officer is Mr. Mian according to a corporate search Aviva filed, registered a $4,558,298 charge on the project on October 24, 2025, per the Armstrong Affidavit, para. 59. The amended initial order discharged ICP's registration and directed its deletion from title; despite repeated follow-up from the surety's DIP lender, the monitor reports, it remains on title, per the Third Report, para. 52.