Shawn Oaks: $61.5 million on Oak Street, and nothing past the first mortgage

The 72 town homes at 5505–5585 Oak Street in Vancouver stand on about 139,000 square feet in the Shaughnessy/Oakridge neighbourhood, and they are rented to third parties. When Trez Capital Limited Partnership approved a $44,211,000 first mortgage loan to Shawn Oaks Holdings Ltd. and Landmark Shawn Oaks Development Ltd. in December 2019, the commitment letter described four two-storey wood-frame apartment buildings, security over 62 of their 72 strata units, and a borrower that "intends to acquire the remaining units in the Parent Property over the term of the loan and eventually redevelop the site to its highest and best use," per the Affidavit #1 of C. Skogen, Dec. 18, 2024, para. 7 and Ex. "A", p. 1. The site is a "Unique Site" in the Cambie Corridor, and the proposal made under the City of Vancouver's enhanced rezoning process contemplated a 31-storey strata tower, a 33-storey strata tower, a six-storey building with approximately 180 social housing units and a one-storey, 37-space childcare facility, per the same affidavit, paras. 9–10. A formal rezoning application was never submitted, according to the First Report of the Receiver, July 13, 2026, para. 4.2.

The Trez loan grew to $67,661,000 under a third amending agreement dated July 22, 2021. Peterson Investment Group Inc. lent a further $25,000,000 on a commitment letter of December 20, 2021, secured by a mortgage, an assignment of rents and a general security agreement, and a priority agreement of February 4, 2022 among Peterson, Trez and the debtors ranks the Trez security first. Landmark Premiere Properties Ltd., which holds 30% of the shares of Landmark Shawn Oaks Development, and Helen Chan Sun, its sole shareholder, guaranteed both loans. Both matured on September 1, 2024, and neither was repaid, per the First Report of the Receiver, July 13, 2026, paras. 4.3–4.11 and the Affidavit #1 of C. Skogen, Dec. 18, 2024, para. 4.

TCC Mortgage Holdings Inc., Trez's agent and nominee, petitioned for a receiver in December 2024 on the affidavit of Christian Skogen, Trez's chief risk officer, who deposed that nothing had been paid on the loan since October 7, 2024, that rents of $1,539,134 reported over the ten months to May 31, 2024 had not been remitted against the debt, and that, with no substantive updates from the debtors in six to eight weeks, "The available conclusion is that the rezoning process has indefinitely stalled." Peterson, which Trez understood to be owed $26,928,391.74 at December 1, 2024, supported the appointment, per the Affidavit #1 of C. Skogen, Dec. 18, 2024, paras. 8, 12, 15–16. The guarantors fought it on several fronts: a property manager was already collecting the rents, they said, and $450,000 paid to Trez between August 7 and October 7, 2024 had come from those rents; the petitioner was "seeking to circumvent the foreclosure process and a six-month redemption period"; and they had a listing proposal from CBRE and wanted the property sold outside any receivership. They asked that Mr. Skogen's paragraphs on the rezoning be struck as "wildly speculative, inflammatory and improper," per the Application Response of Helen Chan Sun and Landmark Premiere Properties Ltd., Jan. 17, 2025, Part 4, paras. 11, 13, 15–16; Part 5, paras. 10, 27.

Justice Wolfe heard the application, brought under s. 243(1) of the Bankruptcy and Insolvency Act and s. 39 of the Law and Equity Act, on January 24, 2025, took further submissions on February 13, and that day appointed Alvarez & Marsal Canada Inc. receiver of the lands and the personal property connected with them, per the Receivership Order, Feb. 13, 2025, pp. 1–2, para. 1. Judgments followed against the debtors and the guarantors: $74,374,751.44 for Trez on March 13, 2025, with per diem interest of $30,400.50 from March 14, and $28,781,874.09 for Peterson on April 14, 2025, with per diem interest of $17,536.85 from March 20, per the First Report of the Receiver, July 13, 2026, paras. 4.7, 4.10.

Nineteen confidentiality agreements, one tour

The receiver took proposals from three brokerages and, after consulting Trez and Peterson, retained Colliers Macaulay Nicolls Inc., which listed the lands on April 2, 2025 without a price, "to encourage outreach from interested parties so that the Listing Agent could gauge market feedback and provide potential buyers pricing guidance on a discretionary basis," per the First Report of the Receiver, July 13, 2026, paras. 5.2–5.3. Colliers' marketing report of July 6, 2026 sets out what followed: an MLS e-blast to 905 commercial brokers, e-blasts to 4,700 developers and investors in April and June 2025 and again in January 2026, a Facebook and Instagram campaign that logged 44,229 impressions, an advertisement in Insolvency Insider, direct calls to 50 companies and contacts, and presentations at the Toronto Real Estate Forum in December 2025 and ICSC in January 2026. Nineteen parties signed confidentiality agreements, among them Brookfield, Cressey, Grosvenor, Wesgroup and Northchild. Northchild Group was the only one to tour the site, in August 2025, and after completing its economic analysis it declined to make an offer, citing its attention to other offerings that had undergone significant price reductions, per the First Report of the Receiver, July 13, 2026, App. "A", pp. 1–5.

Colliers puts the absence of offers down to the development-land market: "Changes to housing policy, lack of optimism regarding absorption and end sale or lease values, significant existing inventory both built and under construction, construction costs and availability of capital have led to a material shift in the market," per the First Report of the Receiver, July 13, 2026, App. "A", p. 4. The Unique Site designation under the Cambie Corridor Plan, it adds, "creates an additional layer of uncertainty with regards to future use and the time required to work through the rezoning and entitlements process." Many of today's site buyers want cash flow from existing improvements, Colliers says, and Shawn Oaks has rental income. "However, the annual income does not support a purchase price high enough to allow for recovery by the various stakeholders," per the First Report of the Receiver, July 13, 2026, App. "A", p. 4. The receiver's own summary is that after more than 15 months on the market no offer had been submitted, owing to a slowdown in the land and development market and a saturated market for residential units. Over the same period it collected $1,367,000 in net rent, per the First Report of the Receiver, July 13, 2026, paras. 5.5, 8.1.

The lender's bid, and August 12

The first offer came from the lender's side. TC Shawn Oaks FC Limited Partnership, an affiliate of Trez, signed a subscription agreement on July 3, 2026 to take all the shares of Landmark Shawn Oaks Development for $62.5 million, "payable by assumption of the Trez Secured Indebtedness with the remaining amount outstanding under the loan to be an obligation of ResidualCo and a continuing obligation of the Guarantors." The structure was a reverse vesting order: new shares to the purchaser, the existing shares cancelled without consideration, and the excluded liabilities sent to a new subsidiary, per the First Report of the Receiver, July 13, 2026, paras. 5.6, 5.8–5.9. The receiver's application, filed July 21 and returnable August 12 before Justice Fitzpatrick, was plain about the second mortgage: "The Transaction will not yield any recovery for Peterson or other stakeholders, and the Debtors have no other assets once the Lands are sold," per the Notice of Application, July 21, 2026, Part 2, paras. 24–28. A second application, filed July 28, asked to discharge the receiver on the filing of its certificate, with further fees estimated at approximately $50,000 for the receiver and $60,000 for its counsel, Dentons Canada LLP, per the Notice of Application re Discharge Order, July 28, 2026, Part 1, para. 1. Colliers, for its part, had proposed to re-market the property with the offer's price published, to "aid in bringing competing offers forward in court," per the First Report of the Receiver, July 13, 2026, App. "A", p. 5.

On August 12 the sale application was adjourned "to provide the Original Purchaser with additional time to consider the structure of the proposed Trez Transaction," per the Second Report of the Receiver, Sept. 4, 2026, para. 1.3. Justice Fitzpatrick's order that day approved the receiver's activities and its statement of receipts and disbursements, the receiver's fees of $273,576.00 and disbursements of $515.47, and Dentons' fees of $77,927.50 and disbursements of $1,097.00, each plus taxes, for February 13, 2025 to June 30, 2026, per the Order Made After Application, Aug. 12, 2026, paras. 1–4. It does not discharge the receiver.

BBG Management's agreement

The Second Report, filed September 4, picks up from the adjournment. The original purchaser told the receiver it was "considering an alternative transaction structure that remained subject to further consideration," per the Second Report of the Receiver, Sept. 4, 2026, para. 4.1. Colliers had held further discussions with various potential purchasers before and after the hearing, and they ended in a letter of intent from BBG Management Inc. The receiver then negotiated an agreement "substantially on the same commercial terms as those contemplated by the Trez Subscription Agreement for a purchase price of $61.5 million," signed on September 3, per the Second Report of the Receiver, Sept. 4, 2026, para. 4.2.

BBG was to pay a $3.5 million deposit to the receiver's solicitors on or before September 4 and is to pay the balance on closing, 20 business days after the approval and reverse vesting order, a date each party may extend once, unilaterally, by up to ten business days. Court approval is the only condition precedent. The debtors retain the lands, the shares of Shawn Oaks Holdings, the residential leases, the strata property management service agreement of June 29, 2021 with Strata Corporation VR 855 and Fraser Park Realty Ltd., and whatever cash remains after prior-ranking amounts, receivership wind-up costs and commissions. The excluded contracts and every other liability go to ResidualCo, and BBG ends up with 100% of the shares of Landmark Shawn Oaks Development, per the Second Report of the Receiver, Sept. 4, 2026, paras. 4.3–4.4. The agreement itself provides for no adjustments to the price and forfeits the deposit to the receiver as liquidated damages if BBG fails to close once its conditions are met, per the Second Report of the Receiver, Sept. 4, 2026, App. "A", ss. 3.1–3.2, 3.4.

The report works through the four questions the receiver's July application had taken from PaySlate Inc. (Re), 2023 BCSC 608, citing Harte Gold Corp. (Re), 2022 ONSC 653, per the Notice of Application, July 21, 2026, Part 3, para. 10. Why an RVO: "the RVO allows for a share transaction, which allows the Purchaser to acquire the Lands and Property without triggering property transfer tax," and BBG's agreement requires one. Other parties, the receiver says, were free to bid as a share deal or a conventional asset sale, and it is not aware of any stakeholder who may be worse off under the structure, per the Second Report of the Receiver, Sept. 4, 2026, para. 4.7. It describes BBG's deal as "the best and highest offer resulting from the sale process" and "commercially similar to the Trez Transaction," supported by Trez and negotiated at arm's length, and concludes that the lands were marketed comprehensively and fairly and that the market was adequately canvassed, per the Second Report of the Receiver, Sept. 4, 2026, paras. 4.5–4.6.

Where the $61.5 million goes

The second order sought is a distribution order in favour of Trez Capital Limited Partnership and TCC Mortgage Holdings Inc. "as the first-ranking senior secured creditor." Dentons' independent opinion is that the Trez security is valid, binding and holds a perfected, first-ranking security interest over the debtors' property; in the First Report the same firm had confirmed the Peterson security too, subordinate under the 2022 priority agreement, per the Second Report of the Receiver, Sept. 4, 2026, paras. 1.5, 6.3 and the First Report of the Receiver, July 13, 2026, paras. 4.11–4.12. The receiver expects approximately $61.5 million in gross proceeds and intends to distribute $61.5 million in aggregate to Trez. "As there is a shortfall in respect of the Trez Secured Indebtedness, there will be no available funds for other creditors." Once the deal closes, to the best of the receiver's knowledge, nothing will be left in the estate, per the Second Report of the Receiver, Sept. 4, 2026, paras. 5.1, 6.1–6.4.

The rent has kept arriving while the deal was made. Between July 14 and August 28, 2026 the receiver took in $250,000 of net rent and $1,689 of interest, paid out $83,045, of which $52,001 went to legal fees and $30,585 to its own fees, and closed the period holding $1,156,260 in trust, per the Second Report of the Receiver, Sept. 4, 2026, paras. 7.1–7.3. The report, signed for the receiver by Anthony Tillman, senior vice-president, and Vicki Chan, vice-president, recommends both orders. It gives no hearing date, and the notice of application it accompanies is not in the record read for this piece.