Portwood: Woodbourne's first mortgage, second mortgage and half the equity

In December 2018 a limited partnership called WPH bought about 23 acres of Port Moody known as Woodland Park, with a townhome development that paid rent, for approximately $97.5 million, per the Monitor's First Report, Aug. 19, 2026, paras. 2.4–2.5. The rezoning was enacted in December 2021, and the master plan, marketed as Portwood, came in five parts: The Creek, 328 affordable rental units; Umbra, a six-storey building of 219 strata units; The Hub, 138 market rental homes over approximately 25,000 square feet of retail; and The Mews and The Terraces, buildings of up to 15 and 14 storeys planned as for-sale condominiums, per the Petition to the Court, Aug. 14, 2026, paras. 12–13.

The first two phases are now being built by others. What remains is 3.28 acres of Phase 3 land at 1218 Cecile Drive, with development and building permits in place for approximately 158,000 square feet, and 13.65 acres of rezoned Phase 4/5 land. Across the two, 108 Cecile Drive townhomes still bring in approximately $202,000 a month, while 30 former strata units on Highview Place sit empty under demolition notices issued on August 25, 2025, per the Petition to the Court, Aug. 14, 2026, paras. 16, 18–21.

On August 14, 2026, Justice Blake of the Supreme Court of British Columbia, Vancouver Registry No. S-266074, granted an initial order under the CCAA over the four entities that own that land, Portwood Development 3 Limited Partnership and Portwood Development 4 Limited Partnership and their general partners, per the Initial Order, Aug. 14, 2026, paras. 2, 14. The petitioners were their senior lenders: WB Portwood Holdings (INT) MF ULC, WB Portwood Holdings MF ULC and WB Portwood Holdings (CA) ULC, affiliates of Woodbourne Canada Management Inc. "created to acquire and hold the first secured indebtedness owed by the respondents to QuadReal," in the words of Jake Herman, Woodbourne Canada's chief executive, in the Affidavit #1 of Jake Herman, Aug. 14, 2026, para. 1 and Ex. "A", para. 4. Other Woodbourne affiliates hold the second mortgage and one half of the equity, per the Petition to the Court, Aug. 14, 2026, para. 3 and the Monitor's First Report, Aug. 19, 2026, para. 2.11. PricewaterhouseCoopers Inc. was appointed monitor with enhanced powers, and ten days later the court approved a sale process whose stalking horse is the petitioners' own credit bid.

A partnership that stopped agreeing

EDGAR Development Corp., a British Columbia developer, brought the site to Woodbourne Canada in 2018. Woodbourne fund entities supplied the capital, and EDGAR, as development manager, was to be paid 4.75% of project costs per phase and a rezoning fee capped at $6 million, per the Monitor's First Report, Aug. 19, 2026, paras. 2.1–2.2, 2.6.

The account of how that arrangement broke is the petitioners', which the Monitor repeats as what it "understands." In 2022 EDGAR wanted to proceed with Phase 2 as a condominium, launched presales, and began charging development management fees on Phases 2 and 3 without the partnership's unanimous consent. The Woodbourne entities went to arbitration and won: the arbitrator held that the partnership had not decided to proceed, that EDGAR could not charge the fees, and that it had to reimburse those already charged, per the Petition to the Court, Aug. 14, 2026, paras. 42–43. The sale of Phase 2, to a buyer EDGAR found, came in the settlement of EDGAR's leave application. It closed in April 2024: the Woodbourne entities sold their 50 Class C units in WPH to KingSett Residential Development Fund LP No. 1, Phases 3 to 5 moved into the two Portwood partnerships, and approximately $28.9 million went to QuadReal for a partial discharge of its security, per the Monitor's First Report, Aug. 19, 2026, paras. 2.9–2.10, 3.3–3.4 and App. "A".

Neither of two marketing processes ended in a sale. Cushman & Wakefield's in 2023 drew a verbal offer from a local developer, but EDGAR "did not wish to move forward with the offer." CBRE's in 2025, run under QuadReal's forbearance, drew an offer from the same developer at a further discount that did not cover the indebtedness and that neither side would accept, per the Petition to the Court, Aug. 14, 2026, paras. 44, 48. "The Partnership is now in a state of deadlock," the Monitor's application says, the partners unable to agree "whether to sell or to develop the Remaining Property," per the Notice of Application, Aug. 19, 2026, Part 2, para. 19. EDGAR is on the service list through Owen Bird and has filed nothing in the record so far.

Two mortgages, one group of lenders

QuadReal Real Estate Debt (Canada) refinanced the original bcIMC mortgage in March 2022 and, after the restructuring, re-papered the loan to the two Portwood partnerships on June 4, 2024: up to $122.8 million, comprising a $110,722,322 predevelopment facility and a $12,077,678 letter of credit facility, interest only at one-month adjusted term CORRA plus 350 basis points with an 8.80% floor, maturing April 1, 2025, per the Petition to the Court, Aug. 14, 2026, paras. 24, 28–29.

It was not repaid at maturity. Interest during the extension had been serviced by advances from the Woodbourne mezzanine lenders; in April 2025 QuadReal stopped funding predevelopment costs, made demand, and entered a forbearance under which interest accrued and the land had to be listed. On February 13, 2026, QuadReal and Woodbourne Investment Corp. signed a term sheet for the loan, and on March 16 QuadReal sold it to the three WB Portwood entities, which served demands and notices under s. 244 of the Bankruptcy and Insolvency Act on June 17 for $122,230,613.00 as of May 31, per the Petition to the Court, Aug. 14, 2026, paras. 35–40, 46–47. The Monitor puts the senior facility at approximately $125,002,419.52 as at August 17, per the Notice of Application, Aug. 19, 2026, Part 2, para. 14.

Behind it sits the mezzanine loan, secured by a second mortgage and guaranteed by EDGAR and three individuals, at approximately $113,890,228.39 on June 30, 2026, per the Petition to the Court, Aug. 14, 2026, paras. 23, 34. Supplemental advances of up to $9.375 million, added by five amendments in 2024 and 2025, matured on September 26, 2025; the rest falls due October 31, 2027. "Accordingly," Mr. Herman affirmed in July, "Woodbourne Canada related entities hold or control the first and second mortgage position in respect of the remaining security," per the Affidavit #1 of Jake Herman, Aug. 14, 2026, Ex. "A", paras. 29–30, 34.

At June 30, 2026 the debtors' books carried $224.887 million in assets against $242.144 million in liabilities, $236.875 million of it the two secured loans, per the Monitor's First Report, Aug. 19, 2026, paras. 2.35, 2.40. MNP LLP's 2025 audit reports on both partnerships flagged a material uncertainty about their ability to continue as going concerns, and on August 4, 2026, PW 3 LP had approximately $94.52 in cash, per the Affidavit #1 of Jake Herman, Aug. 14, 2026, paras. 42–44, 50. Unsecured claims on the Monitor's August 21 list total $1,182,081.19, of which $978,206.04 is owed to Axiom Builders Inc. and $120,750.00 to EDGAR Development Corp., per the Creditor Listing, Aug. 21, 2026, p. 1.

Why a monitor and not a receiver

The WB entities first prepared an application to appoint PwC as receiver and manager. The difficulty was the title holder: 1030 Cecile Drive Holdings Ltd. holds the Phase 3 and Phase 4/5 lands as bare trustee for the partnerships, and it is also the registered owner of the land on which Umbra is going up. Counsel advised that a receiver over the nominee "may engage or trigger purchaser rescission rights in respect of Phase 2 under the Real Estate Development Marketing Act," and, "in consultation with the Phase 2 beneficial owners," the petitioners turned to the CCAA, per the Affidavit #1 of Jake Herman, Aug. 14, 2026, paras. 7–14.

The order, made by consent, is built around that constraint. The general partners are the debtor companies and the partnerships take its protections by extension, while the nominee is "neither a 'Debtor' nor a party to these proceedings" but is shielded from proceedings arising from the debtors' defaults. A section headed "Project Umbra Unaffected" lets KingSett, WPH, WPH's general partner and EDGAR, with the Monitor's consent, step in and perform off-site works or other obligations of the debtors that Umbra needs, with notice and cure periods deemed waived. The Monitor's powers do not reach Phase 2, and it may not disclaim Axiom's construction management contract, the development agreement with the City of Port Moody or three April 2024 agreements with WPH before Phase 2 is complete, absent WPH's consent or an order, per the Initial Order, Aug. 14, 2026, paras. 2, 16, 21–22, 25, 28(aa)–(bb).

What the enhanced powers are

The Enhanced Powers Property is defined in paragraph 27 of the initial order as all of the property and business of the four debtors, including the lands, plans, permits, pre-sale deposits and sale proceeds, and, "for the limited and sole purpose of executing transfer of title documents," the nominee's registered title. Over it the Monitor may exercise the powers of the debtors' directors and officers, take possession, run the business, operate the bank accounts, market and sell the land with court approval, sign transfers in the nominee's name and seek vesting orders. When it acts, it acts "to the exclusion of all other Persons, including the Debtors, the Nominee and their past or present directors, officers, partners, and shareholders," per the Initial Order, Aug. 14, 2026, paras. 27–29. Among Mr. Herman's reasons for asking were two failed sales and "parties whose interests have diverged and who have previously been involved in disputes concerning the Portwood development," per the Affidavit #1 of Jake Herman, Aug. 14, 2026, para. 26.

The petitioners are also the interim lender. Their commitment letter of August 13 provides a $500,000 non-revolving facility at 10.8%, maturing no later than December 18, 2026, which only the Monitor may draw and none of which may go to Phase 2. Its charge, capped at $600,000, ranks behind only the $200,000 administration charge and ahead of all other security, "including the existing security held by the DIP Lenders in their separate capacities as pre-filing secured creditors." Replacing PwC without the lenders' consent, or cutting back its enhanced powers, is an event of default, and the borrowers may pay no management or development fee, per the Affidavit #1 of Jake Herman, Aug. 14, 2026, Ex. "F", ss. 1–4, 6–7, 10, 15, 17 and the Initial Order, Aug. 14, 2026, paras. 42–47, 50. The 13-week forecast to November 6 draws $450,000 on it against $722,100 of professional fees, and assumes the EDGAR and Woodbourne partners each contribute $1,906,955 toward off-site servicing works for Phase 2, per the Monitor's First Report, Aug. 19, 2026, para. 5.3 and App. "C".

A credit bid of $127.1 million

On August 19 the Monitor, in a First Report signed by Claire Wheldon and Kirandeep Dhillon, applied for a sale process built on a stalking horse agreement negotiated with the petitioners. The price is $127,100,000.00, which the report describes as the amount required to pay out the senior facility at the anticipated closing date. The purchasers pay it by set-off against the first mortgage, and "no cash payment or wire transfer shall be required," though priority payables, the administration charge and property taxes among them, must be paid in cash. They take the lands, development rights, contracts and bonds as is, where is, and assume sales taxes, liabilities to the City of Port Moody under the development rights and the bonds owed to QuadReal, whose consent is a condition; the outside date is December 18, 2026, per the Monitor's First Report, Aug. 19, 2026, para. 8.13 and App. "E", ss. 1.1, 2.1, 2.3, 3.1, 5.2(a), 5.3(a). If the court requires it, the purchasers must first obtain judgment on the first mortgage, and the Monitor has asked them to bring that application alongside any approval and vesting order, per the Notice of Application, Aug. 19, 2026, Part 2, para. 28.

The agreement carries no break fee but does provide an expense reimbursement of up to $300,000, payable from the proceeds of a winning third-party bid, per the Monitor's First Report, Aug. 19, 2026, para. 8.14 and App. "E", s. 10.3. The Monitor's notice of application, filed the same day, describes the agreement as containing no "break fee, expense reimbursement or other bid protection." Its case for the structure is that the earlier processes failed "not because the market was exhausted, but because the partners were deadlocked," and that "the fact that the Stalking Horse Bidder is the senior secured creditor does not render the SISP unfair," because every rival bid is measured against the same threshold, per the Notice of Application, Aug. 19, 2026, Part 3, paras. 40–43.

Thirty days to beat it

Justice Blake granted the sale process order and an amended and restated initial order on August 24, 2026, extending the stay to October 26, 2026, per the Sale Process Order, Aug. 24, 2026, paras. 2, 5–6 and the Amended and Restated Initial Order, Aug. 24, 2026, para. 12. The Monitor's reason for the short clock is that the land has already been marketed twice, and "extending the process would likely result in additional carrying costs and interest accruals without a corresponding benefit to stakeholders," per the Monitor's First Report, Aug. 19, 2026, para. 8.7.

Bids are due by 5:00 p.m. Pacific on September 24, 2026, for the whole or, with a rationale, for parts. Each needs a 5% deposit rising to 10% on selection, no financing or diligence conditions, no bid protection, and consideration on closing covering everything secured by charges on title and by the court-ordered charges, assumed liabilities and wind-up costs, and no less than the stalking horse, which is deemed qualified and posts no deposit, per the Sales and Investment Solicitation Process, Aug. 24, 2026, ss. 7, 9, 15, 27. In paragraph 8 of the order as entered, which confirms that test, the words "set-off or assumptions of liabilities, as applicable" are struck through by hand after "payable in cash in full on closing," per the Sale Process Order, Aug. 24, 2026, para. 8.

If no other qualified bid arrives, the stalking horse becomes the successful bid on September 25, with an approval and vesting hearing on October 5 and closing on October 15. If one does, the Monitor is to select a winner and any back-up bid by October 1, seek approval on October 26 and close no later than November 10, 2026, per the Sales and Investment Solicitation Process, Aug. 24, 2026, Key Dates.