Trinity Automotive: $16.9 million of cars, and who knew when

Boban Murikkal James started with a service centre in Brampton in 2013 and bought something almost every year after that: a collision shop in 2016, a used-vehicle superstore in 2020, Oakville Mitsubishi in 2021, Stratford Kia and Stratford Nissan in 2022, a commercial plaza in 2023, Mississauga Chrysler in 2024, and the real estate under it in 2025. By this summer the group was fifteen companies, four franchised dealerships, two used-car superstores, a collision centre, a towing business, a rental fleet and two pieces of development land, employing about 144 people, per the Pre-Filing Report of the Proposed Monitor, Aug. 6, 2026, paras. 20–27 and the Affidavit of Daniel To, Aug. 5, 2026, paras. 18–19, 51.

On August 7, 2026 Justice Black granted an initial order under the CCAA on the application of Bank of Montreal, which is owed $85,231,866.83, per the Affidavit of Daniel To, Aug. 5, 2026, paras. 8, 60 and the Initial Order, Aug. 7, 2026. The applicant is the lender; the debtors are the respondents. Everything that has happened since follows from that.

Sold in violation

A floorplan lender finances new and used inventory car by car and is repaid when each car is sold. A vehicle sold and delivered without the corresponding advance being repaid is, in the trade's language, sold in violation.

BMO's affidavit sets out how the number was found and how it moved. Steinberg Advisory Corp., retained by the debtors in May 2026, identified 46 such vehicles at Mississauga Chrysler on June 17, about $3.17 million, plus one stolen vehicle. A full physical count on July 2 and 3, run by Goldhar & Associates Ltd. — retained by BMO on June 22 as its own financial advisor — found 264 vehicles across the dealerships representing about $13.04 million of unrepaid advances, against 135 self-funded vehicles worth about $2.88 million, for a net exposure of roughly $10.2 million, per the Affidavit of Daniel To, Aug. 5, 2026, paras. 9, 75, 81. BMO says it "lost confidence that management can stabilize the Businesses and implement the necessary restructuring without Court supervision and meaningful controls," per the Affidavit of Daniel To, Aug. 5, 2026, para. 11.

By September 7 the monitor's counsel put the figure higher again, in a letter that also puts the accusation in the plainest terms it has yet taken: the objections being raised come "in circumstances where the former principal of the business cannot account for what now appear to be up to $16.9 million of proceeds of sale of vehicles sold in violation of agreements with the Respondents' senior secured lender," per the Second Supplement to the Monitor's Second Report, Sept. 7, 2026, Appendix "A".

The respondents do not, on this record, dispute that vehicles were sold in violation. They dispute that it was news. Their counsel's letter of September 6 sets out a dated list of BMO's own dealership audit findings, beginning with July 30, 2020, when the bank's audit team "identifies $174,071.40 worth of vehicles sold-in-violation at the Oakville Used Car Superstore and requests payment," and running through September 3, 2025, when it "identifies $3,598,401.55 worth of vehicles sold-in-violation at Mississauga Chrysler and $1,051,957.47 at Stratford Nissan," to November 18, 2025. Their conclusion: "The existence of SIVs was part of the ordinary course of conduct in the lending relationship between BMO and the Respondents for six years" — during which, they say, the bank extended and increased credit, including the 2023 mortgage, the 2024 acquisition financing and the amended credit agreement of August 29, 2025, per the Motion Record of the Respondents, Sept. 7, 2026, Exhibit "A" (letter of Sept. 6, 2026), pp. 4–5.

The monitor's answer is careful, and it concedes the ground it does not need: "regardless of when the parties were aware that vehicles were being sold-in-violation, the known scope and quantum of the issue has continued to grow and is materially worse today than it was at any prior point in time," per the Second Supplement to the Monitor's Second Report, Sept. 7, 2026, Appendix "A".

None of this has been tested. Each account is an allegation in the instrument that makes it.

What the comeback order handed over

The amended and restated initial order of August 17 is where the balance of power in this proceeding was set. Justice Conway extended the stay to October 30, raised the administration charge from $350,000 to $750,000 and the interim financing charge from $500,000 to $3.5 million, and rescheduled the sale-process motion from August 21 to September 8 because, "according to the Monitor's counsel, they will not be ready by then," per the Amended and Restated Initial Order, Aug. 17, 2026 and the Endorsement of Conway J., Aug. 17, 2026, para. 9.

The endorsement also records the respondents' posture that day, through counsel newly on the file: "Ms. Miller is now on for the Debtors. She takes issue with some of the factual characterizations but does not oppose the relief sought," per the Endorsement of Conway J., Aug. 17, 2026, para. 3. That sentence is now doing a great deal of work, because the monitor's position is that the debtors cannot revisit what they did not oppose.

Eight days later the relationship had changed. On August 25 the respondents' counsel wrote about appointment letters issued by the monitor to management, saying some "appear to be terminations of existing management without actually stating so," and closing with a question that is really a warning: "In taking these steps without notice or any discussion with the directors, officers and existing management of the Respondents… the Monitor is exercising powers of a receiver. Perhaps we should discuss if that is the process through which your client would prefer this proceeding continue," per the Motion Record of the Respondents, Sept. 7, 2026, letter of Aug. 25, 2026, pp. 1, 4.