Sussman Mortgage Funding: a land-lease community for sale, with no broker

On October 26, Justice J. Dietrich of the Ontario Superior Court of Justice (Commercial List) approved a sale and investment solicitation process for the Uptergrove lands in the Township of Ramara and the assets of the residential community on them, land leases included, on the motion of GlassRatner Restructuring Inc., receiver of Sussman Mortgage Funding Inc. (SMFI), 2486976 Ontario Inc. (248) and 1981361 Ontario Inc. (198). Notice is to go out by November 1 and binding bids are due by 5:00 p.m. on December 15; a successful bid and a back-up are to be chosen by January 5, 2027, with a motion for approval on January 18, 2027, subject to court availability, and an outside closing date of January 29, per the SISP Approval Order, Oct. 26, 2026, para. 3; Sched. "A", recitals and para. 3. A second order approved the Third Report, the activities it describes and the fees and disbursements of the receiver and its counsel for the year to September 30, per the Ancillary Order, Oct. 26, 2026, paras. 3–5.

The receiver's reports call the property the Alliance Project: a manufactured home community on an 11.5-acre site, planned for 300 homes, in which "customers purchase the homes but lease the land, generating an additional income stream for the land owner." In June 2025, 87 of the 100 units in Phase 1 were built and occupied, and Phases 2 and 3, of 100 units each, had yet to be built, per the First Report of the Receiver, June 2, 2025, paras. 122–123 and the Third Report of the Receiver, Oct. 19, 2026, para. 5(e).

Compro's consent

Only half of the beneficial interest is in the receivership: 198 and Alliance Compro Inc. each hold a 50% undivided interest as tenants in common, and article 7.1 of their co-tenancy agreement requires the prior written consent of all members before either may dispose of its interest. The receiver weighed demand on the Alliance mortgages and a receivership of the project against a consensual sale, and believes the consensual route "would optimize recoveries," citing among other things that a project receivership would incur additional professional fees, "may destabilize operations, cause a loss of key management and personnel needed to support any sale process," and "may expose a receiver to potential environmental liability associated with the operation of water and sewage treatment plants." It turned to a sale, the report says, because efforts by the receiver and Alliance Homes Inc. to secure construction financing "have not resulted in a suitable financing option," per the Third Report of the Receiver, Oct. 19, 2026, paras. 48, 50, 52–53.

Compro told the receiver it would consent to and support a sale process in exchange for releasing an individual guarantor of the Alliance mortgages from a personal guarantee. Having reviewed the costs and benefits, the receiver recommends the consensual sale, and Aird & Berlis LLP, the investors' court-appointed Representative Counsel, and Thornton Grout Finnigan LLP (TGF), counsel to an investor group that includes Logpin Investments Limited, support it. The terms are in a standstill and support agreement of October 19, which the report says the parties have executed and which is subject to the court granting the sale process order, per the Third Report of the Receiver, Oct. 19, 2026, paras. 3, 54–55, 59–60 and the Second Report of the Receiver, Oct. 15, 2025, para. 10.

In it, the nominee that holds title and Compro acknowledge the two mortgages it covers, registered in 2007 and 2009, as valid and binding, and acknowledge liability for obligations that, as at September 30, 2026, include $14,997,082.93 and $22,112,067.75 respectively in principal and accrued and unpaid interest. They acknowledge the nominee's defaults, which include approximately $522,185 of unpaid realty taxes owed to the Township of Ramara, and give their irrevocable consent to the sale of 198's interest, the property and the community. The release comes only on closing: subject to the guarantor and Alliance Homes satisfying their obligations, or the receiver waiving them, the receiver is to release their guarantees once a transaction acceptable to it, selected in the sale process and approved by the court if approval is required, closes with no termination event continuing. The receiver has "no obligation to accept the highest offer or any offer," and the Alliance parties have no right in the evaluation of offers, per the Third Report of the Receiver, Oct. 19, 2026, App. "J", ss. 2.1, 5.2, 7.1.

A small pool of buyers

The guarantor and the receiver have both been in contact with interested parties. From those discussions and others with industry participants, the receiver determined there is "likely to be a small pool of potential purchasers for the Alliance Project given the complexities of operating a land lease community," and does not intend to engage a real estate broker; it will undertake "targeted outreach" to potential purchasers and publish notices in the Globe & Mail and the Insolvency Insider, per the Third Report of the Receiver, Oct. 19, 2026, paras. 56–57.

Bidders may offer to buy or invest in the assets or the business, or to restructure, recapitalize or refinance it; an en bloc transaction is preferred. A qualified bid must be binding, carry a deposit of at least 10% of the cash price, and be conditional on neither due diligence, financing nor any other material closing condition, though it may be conditional on court approval. The receiver will evaluate each one "in consultation with Representative Counsel and [the investor group]," and would set any auction's procedures and select its winner in the same consultation, per the SISP Approval Order, Oct. 26, 2026, Sched. "A", paras. 1, 12, 15, 17.

That investor group, which the record names after some of its members, includes Logpin Investments Limited, and under the amended and restated receivership order of July 25, 2025, several steps the receiver may take need its consent and Representative Counsel's, per the Amended and Restated Receivership Order, July 25, 2025, recitals, paras. 3(j), 3(l), 18. The receiver says those requirements "have resulted in delays and higher costs," per the Third Report of the Receiver, Oct. 19, 2026, para. 11.

How the receivership began, and what the books held

On the application of the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario, Justice Dietrich appointed B. Riley Farber Inc., now operating as GlassRatner, receiver of SMFI, 248 and 198 on May 2, 2025, under s. 37 of the Mortgage Brokerages, Lenders and Administrators Act, 2006 in respect of SMFI and s. 101 of the Courts of Justice Act in respect of all three, per the Receivership Appointment Order, May 2, 2025, para. 2 and the Third Report of the Receiver, Oct. 19, 2026, para. 2.

SMFI, of Barrie, operated as a registered mortgage broker, mortgage administrator and deposit broker that aggregated private investors' money into syndicated mortgage loans; 248 and 198 held equity in three housing developments, Ballymore, Alliance and Waterways. The receiver's First Report counted 117 unique investors and approximately $101 million of principal invested in 38 loans in which investors' principal had not been repaid, and said interest on the projects' advances was capitalized, "which meant that very little interest was actually paid by borrowers to SMFI. At the same time, SMFI had to pay monthly interest to Investors, creating a cash-flow deficit," per the First Report of the Receiver, June 2, 2025, paras. 11–13, 23, 25, 27, 30–31. The receiver assigned 198 and 248 into bankruptcy in November 2025, and on January 7, 2026 Justice Dietrich made a bankruptcy order against SMFI appointing GlassRatner trustee, per the Third Report of the Receiver, Oct. 19, 2026, paras. 12, 16 and the Bankruptcy Order, Jan. 7, 2026, paras. 1–2.