Pride Group: the Sweet Home recipients write back

The letter from Mann's Truck Sales & Leasing Inc. is dated September 18, two months after the first of the Monitor's two letters to it, and it opens on the delay: "The absence of an earlier response was not intended as a refusal to comply with the Order" (Monitor's Forty-Seventh Report, Sept. 21, 2026, App. "C"). Its counsel, Freedman Benipal Wu LLP, then explained that the transfers out of Maplewood Inn, LLC's bank account that the Monitor had put to Mann's, "including the transfers of $865,000 on April 16, 2024 and $1,635,000 on April 19, 2024," were "not separate commercial transactions between Mann's and Maplewood," and that "Mann's acted solely as an intermediary" (Monitor's Forty-Seventh Report, Sept. 21, 2026, App. "C").

As reported here on August 8, Ernst & Young Inc., the Monitor of Pride Group's wind-down, had by then written twice to the three parties it had traced money to from the account of Maplewood, owner of the Holiday Inn in Liverpool, New York — Mann's, Multi Truck Sales and an individual, the wife of one of the two principals — the second time with a warning of contempt, and none had written back. All three have now answered. The Monitor's Forty-Seventh Report, filed September 21 in support of a motion to keep the hotel's sale proceeds frozen until December 31, 2026, sets out where each answer has left it (Monitor's Forty-Seventh Report, Sept. 21, 2026, paras. 10(c), 27–29).

What Mann's says it carried

By the Monitor's own count, what went to Mann's from the hotel's account came to US$3,000,000 (Monitor's Aide Memoire, Aug. 22, 2026, para. 6). The letter from Mann's counsel places that money inside a larger movement. "The transactions identified by the Monitor formed part of a larger cross-border transfer of funds involving [the individual]," it says. "Specifically, Mr. Johal transferred approximately USD $3,000,000 to Mann's Truck Sales & Leasing Inc.," or to an individual the firm also represents, in the United States; converted, that came to approximately CAD $4,000,000, and Mann's or the individual then "transferred those funds back to Mr. Johal in Canada" (Monitor's Forty-Seventh Report, Sept. 21, 2026, App. "C"). The April transfers, on this account, "represented portions of the Canadian funds returned to Mr. Johal following receipt of the USD $3,000,000 transferred by him in the United States." Mann's took no beneficial interest and "did not retain the monies for its own account," and if the Monitor wants a commercial purpose, the clients' instructions are that the transfers "were undertaken solely to facilitate the movement of Mr. Johal's funds from the United States into Canada" (Monitor's Forty-Seventh Report, Sept. 21, 2026, App. "C").

The bank records, wire confirmations and accounting records behind that account are, the letter says, still being assembled, and will be produced "promptly" (Monitor's Forty-Seventh Report, Sept. 21, 2026, App. "C"). In its report the Monitor says only that it "is reviewing and considering next steps in respect of same," and that it has sent a copy to the Johal Trustee, PricewaterhouseCoopers Inc., trustee in the bankruptcy of the two Pride principals, with whom the Sweet Home order authorizes it to share whatever its investigation turns up (Monitor's Forty-Seventh Report, Sept. 21, 2026, para. 29; Second A&R Sweet Home Production and Investigation Order, Aug. 24, 2026, para. 11).

A loan to Block 6

The spouse answered first, through Lax O'Sullivan Lisus Gottlieb LLP, on August 7. Her counsel acknowledged the US$575,000 paid into her personal bank account on August 16, 2024 and the US$50,000 paid on August 22, said the account had since been closed, which was making the statements hard to gather, and gave the money a purpose: "partial re-payment of a loan [she] made jointly with her husband to Block 6 Holding Inc. in August/September 2023." The spouse, the letter adds, "understands that her husband owns and controls Maplewood Inn LLC and that he authorized Maplewood to make the partial repayment" (Monitor's Forty-Fifth Report, Aug. 14, 2026, App. "J"). Block 6 Holding Inc. is the Pride company that owned land at 7265 5 Side Road in Milton, Ontario; the land sold on April 5, 2024, and the Monitor holds approximately $2.7 million of the proceeds in trust for a claims process of its own (Monitor's Forty-Seventh Report, Sept. 21, 2026, paras. 37 n. 1, 41–42).

The Monitor's counsel wrote back on August 12. On August 11, 2025, about a year after the transfers, the spouse had filed a proof of claim against Block 6 asserting an unsecured claim of CAD$9,125,410.95, a claim that, the Monitor's counsel wrote, "makes no mention of any partial repayment" (Monitor's Forty-Fifth Report, Aug. 14, 2026, App. "J"). The letter names her husband, one of the two Pride principals. The Monitor's position is that the transfers fell within a year of the start of Block 6's own CCAA proceedings, that Sweet Home, Maplewood, Block 6 and both spouses "were not dealing with each other at arm's length," and that "[b]ased on [her] own information," the payments were a preference under s. 95 of the BIA as modified by s. 36.1 of the CCAA. It demanded the US$625,000 back by August 26, 2026 (Monitor's Forty-Fifth Report, Aug. 14, 2026, App. "J"). In the report that filed the exchange, the Monitor described the demand as resting on a preferential payment and on its view "that [she] swore a false proof of claim in the Block 6 Claims Identification Process" (Monitor's Forty-Fifth Report, Aug. 14, 2026, para. 56).

The Monitor has also turned its August 2024 arrows around. Its Forty-Fourth Report's table, which as noted here on August 8 ran opposite to Maplewood's own schedule for that month, "contained errors in respect of the transfers relating to [the spouse]"; the corrected table has US$500,000 coming into Maplewood from Sweet Home on August 15 and the two payments to the spouse going out (Monitor's Forty-Fifth Report, Aug. 14, 2026, App. "I", n. 1).

On September 3 her counsel told the Monitor and the chief restructuring officer that they intended to respond to the August 12 letter. The Monitor's counsel asked on September 14 when a response could be expected, and as of September 21 none had arrived (Monitor's Forty-Seventh Report, Sept. 21, 2026, para. 27).

Loans with no agreement

Multi Truck Sales answered on August 10, in a letter from the president of Multi Truck Sales Inc. That Ontario company, he wrote, was formed in April 2024 and had nothing to do with the transactions, which belong to Multi Truck Sales, Inc., a Delaware corporation formed in May 2024 of which he is the sole officer, director and shareholder; neither company has "common ownership or control with Maplewood or Sweet Home." The entries in the Monitor's table were "loans received by Multi US from Maplewood and repayments of those loans back to Maplewood by Multi US," and "[t]here was no formal loan agreement in place – these were informal transactions." He offered redacted bank statements (Monitor's Forty-Fifth Report, Aug. 14, 2026, App. "K").

The Monitor's counsel replied on August 12 that the transactions had produced a net outflow of US$896,912.17 from Sweet Home and Maplewood to a Multi Truck Sales entity, and asked for everything, including the Delaware company's bank statements and the terms of the "Purported Loan Agreement": quantum, term, purpose, payment terms (Monitor's Forty-Fifth Report, Aug. 14, 2026, App. "K"). The Monitor reports that its counsel also demanded repayment of that sum (Monitor's Forty-Fifth Report, Aug. 14, 2026, para. 57). Partially redacted statements for Multi Truck Sales, Inc. arrived on September 3; the Monitor sought clarification on September 14 and, as of September 21, had no reply (Monitor's Forty-Seventh Report, Sept. 21, 2026, para. 28).