United Earth: three transfers the receiver wants undone

On July 31, 2025, a one-page letter on Dams Ford Lincoln letterhead, signed for United Earth Contractors Corp. and for the dealership, authorized Dams Ford Lincoln Sales Ltd. to buy eight trucks from the contractor — five GMC Sierras, two Chevrolet Silverados and a 2023 Ford F-450 — and to "hold the equity from these purchases for United Earth Contractors (2025) Corp to use it as cash payment on the purchases of the following 5 units," four 2025 Ford F-150s and a 2025 Ford Explorer, per the letter appended to the First Report of the Receiver, Nov. 6, 2025, App. 8. The Supreme Court of British Columbia had put the United Earth group into receivership the day before.

Grant Thornton Limited, the receiver, puts the value moved that day at approximately $310,000 and says the group's owner and sole director, David Kleszewski, authorized it; he is also the sole director of United Earth Contractors (2025) Corp., the company that took the new vehicles, per the Notice of Application (Transfers at Undervalue), Aug. 26, 2026, Part 2, paras. 5–6, 9. On August 26, 2026, the receiver asked the court to set that transfer aside, together with a $36,000 dealership credit applied a month earlier, a $68,000 cheque to Mr. Kleszewski in November 2024, and $275,000 paid in the two days before the receivership order to a company controlled by a former vice-president of the group: $689,000 in all. The same day it filed its Second Report and applied to distribute $6,088,458.43, most of it the price of the equipment fleet sold to an auctioneer last November, per the Notice of Application (Distribution and AVOs), Aug. 26, 2026, Part 1, para. 1; Part 2, para. 26.

Highway 1, and the bank's patience

United Earth was a civil and earthworks contractor based in Delta, working on earth-moving projects in the Lower Mainland, government tenders among them. It ran through four companies: United Earth Civil Corp. for union jobs, United Earth Contractors Corp. for non-union jobs, United Earth Equipment Corp., which owned the equipment and rented it to the other two, and DCK Contracting Ltd., a holding company. In or around June 2023 Mr. Kleszewski bought the group from Anthony Ciccozzi, with Royal Bank of Canada financing the acquisition, per the Affidavit #1 of Bo Alex Wang, July 14, 2025, paras. 5–6.

The account of what went wrong in the record is the bank's. Bo Alex Wang, a director in RBC's Special Loans and Advisory Services department, deposed that the group had been in persistent financial distress since around October 2024, caused primarily by cost overruns and contract disputes on the Fraser Valley Highway 1 expansion. The Minister of Transportation required union labour on the project; the group, he said, "inadvertently budgeted" on the assumption of non-union crews, who charge by the load, where union labour charges by the hour, and restricted road access slowed the work. Work on the project stopped in approximately March 2025, per the Wang Affidavit, paras. 23–25, 28. RBC demanded payment on April 15, 2025, signed a forbearance agreement on June 23 that ran to July 11, and says the group breached it on July 2 by failing to deliver a binding refinancing commitment. The indebtedness as of July 9 was approximately $12,050,851.67, of which $9,548,625.44 sat on the equipment loans, per the Wang Affidavit, paras. 34, 36, 38–39. Justice Latimer appointed Grant Thornton receiver on July 30, 2025, under s. 243(1) of the Bankruptcy and Insolvency Act and s. 39 of the Law and Equity Act, per the Notice of Application (Distribution and AVOs), Part 2, para. 5; Sched. "C".

A fleet with no list

The receiver was never given a comprehensive list of the group's assets. It built its own register from personal property registry searches and, with its bailiff, had seized approximately 131 assets by the time of its first report. Forty parties received its invitation for offers, ten inspected the equipment in storage yards at Abbotsford and Aldergrove, and nine bid, per the First Report of the Receiver, Nov. 6, 2025, paras. 11(d), 13–15, 26. McDougall Auctioneers Ltd. bought 103 assets under an approval and vesting order of November 21, 2025, and the sale closed on November 28 for $6,663,614. Approximately 24 more assets went back to holders of purchase-money security interests, per the Second Report of the Receiver, Aug. 26, 2026, para. 26.

What has surfaced since is smaller. Thirteen items at a Richmond address, given a forced liquidation value of $12,000, went to Montrose Industries Ltd. for $12,000 after it asked $12,500 a month to store them. On March 12, 2026, the bailiff seized five vehicles and machines at a storage yard, and a sixth several days later; Mr. Kleszewski was there, "appeared to be cooperative" and supplied more locations, where nothing further was found, per the Second Report, paras. 11–15. Those six, led by a 2006 CAT 966H wheel loader, would go to auction with Able Solutions Inc. at zero commission, Able keeping a buyer's premium of up to 20% and a $1,000 relocation fee. A 2021 John Deere 350G on Vancouver Island would be consigned to Central Island Rentals + Sales at a list price of $179,900 and a 10% commission, per the Second Report, paras. 17–20; App. 1, ss. 2.2–2.4, Sched. "A"; App. 2.

The construction contracts produced one clean collection: $787,500 from Montrose on January 16, 2026, for work not invoiced before the receivership. On the holdbacks, the receiver consented to the City of Surrey setting off its claims against $561,751.54 held on the 80th Avenue widening, and agreed, against an indemnity, to release $776,728 held on 32nd Avenue to Western Surety Company, which holds assigned supplier claims of $1,385,670.78. Arsalan Construction Ltd. holds $667,541 on 74th Avenue against set-off claims of $1,281,891 the receiver has not accepted. On Highway 1, BA Blacktop's counsel reports a holdback of $1,143,342 and set-off claims of $20,662,289, per the Second Report, paras. 42–50.

Where the sale money goes

The receiver identified $569,275 in receivership costs attributable to creditors and spread it among 13 parties by each asset's share of the value of everything located and secured, plus asset-specific costs to the date each asset was sold or released, using McDougall's own value for each lot sold and the desktop appraisal for assets released, per the Second Report, paras. 30–31.

RBC's 97 assets account for $6,420,072 of the sale price. Less $477,384 in allocated costs and a $100,460.18 holdback for two union claims, it would receive $5,842,227.82. John Deere Financial Inc. would take $157,143, TD Auto Finance (Canada) Inc. $37,621 and Kubota Canada Ltd. $30,550. In addition, the Canada Revenue Agency would receive $9,561.61 on deemed trust claims, and Northside Transport Ltd., which asserts a possessory lien of $12,631.45 that the receiver understands arose from unpaid storage invoices before the receivership, would receive $11,355 after costs, per the Notice of Application (Distribution and AVOs), Part 2, paras. 26, 30–32.

The holdback covers an amended claim of $93,768.18 from the Construction and Specialized Workers' Union, Local 1611, which asserts priority for $45,868.63 in pension contributions under s. 81.6 of the BIA and $39,031.30 under s. 81.4, and asserts that all four companies are jointly and severally liable as common employers; and $6,692 in pension contributions claimed by the International Union of Operating Engineers, Local 115, which filed on August 18, 2026 after the receiver sent notice of its intended distribution to the unions. The receiver is still assessing both claims, per the Second Report, paras. 36–37, 39, 52–53. After paying out and holding back, it would keep approximately $799,845 of the $6,988,764 it held on August 25, 2026, which it considers enough for the rest of the administration, per the Second Report, paras. 38, 71.