Vandyk: KingSett's credit bid and the condo buyers who wanted out

The plan for the approximately 3.13 acres at 1345 Lakeshore Road East in Mississauga was two mid-rise condominium towers with 478 residential units, per KingSett's Affidavit of Daniel Pollack, Nov. 7, 2023, para. 4(e). By the spring of 2026 construction had begun there inside a receivership, and 390 of the units were subject to agreements of purchase and sale, per the Eleventh Report of the Receiver, Apr. 8, 2026, s. 3.0, para. 3. The 56 members of the DXE Condo Purchasers' Association, its factum says, include first-time homebuyers, young families and immigrants who signed on the strength of Vandyk's reputation as "a condominium developer with over 40 years of experience whose projects had won industry awards, including a BILD Pinnacle Award," per the Responding Factum of the DXE Condo Purchasers' Association, Apr. 13, 2026, para. 6.

On April 23, 2026, that association asked Justice Peter J. Cavanagh to hold off approving the sale of the project, with three other Vandyk sites in Brampton and Mississauga, to KingSett Mortgage Corporation, the lender that had financed construction inside the receivership, whose stalking-horse bid had drawn no competition. Many purchasers could not close, the association said, because the gap between their contract prices and the units' market value left them unable to get financing, and it relied on a 2024 decision in this same receivership that had let the receiver disclaim homebuyer agreements. Justice Cavanagh approved the transaction, holding that the 2024 decision is not authority for a duty on a receiver to consider disclaiming contracts where disclaimer, though it would benefit a buyer who wants out, "would not enhance the recovery of assets for the estate in receivership," per the Endorsement of Justice Cavanagh, Apr. 23, 2026, paras. 8–9, 12, 18, 20, 22.

Four sites the receiver set out to build

KingSett and Dorr Capital Corporation applied for the receivership in November 2023; KingSett's affidavit cited defaults including missed interest payments, Lakeview's among them, and said demand letters went out on September 29, per the Pollack affidavit, paras. 99, 103. Justice Conway appointed KSV Restructuring Inc. as receiver and manager on November 14, 2023, per the Approval and Vesting Order, Apr. 27, 2026, Sched. "A", recital A. Uptowns, at 10302 Heart Lake Road in Brampton, was to be approximately 342 stacked townhomes, 329 of them pre-sold, and was partially built at the receivership date. Heartlake, at 10194 Heart Lake Road, was 200 stacked townhomes with 109 pre-sold. The Ravine, at 336 Waterhouse Crescent North in Mississauga, was approved for 39 detached and 6 semi-detached homes; five were under contract at the receivership date, and four of those buyers later terminated, per the Eleventh Report, s. 3.0, paras. 1–4.

For Lakeview, the receiver determined after discussions with key stakeholders that completing the towers would "maximize the potential benefits to stakeholders, including secured lenders and existing pre-sale purchasers," and it selected PCL Constructors Canada Inc., the construction manager before the receivership, on a schedule to May 2027. Among its reasons: "it is possible that if the Lakeview Project was sold that a purchaser of the site would seek to disclaim the pre-sale agreements," per the Third Report of the Receiver, June 6, 2024, s. 2.2, para. 3; s. 3.0, para. 8(b); s. 4.0, para. 1(f); s. 4.1, para. 1(e). KingSett provided the construction financing, a facility of up to $252,750,000, per the Eleventh Report, s. 4.1.3, para. 3.

At Uptowns, in October 2024, Justice Osborne recorded the receiver's opinion that 287 of the 329 contracts were priced "significantly below current market values," a projected deficit of approximately $57.3 million, and KingSett's refusal to advance more without higher prices. He authorized the receiver to offer amended prices, on average 13% below market by the receiver's submission, and to terminate and disclaim the contracts of buyers who did not sign. Courts have held, he noted, that a failure to authorize such disclaimers would amount to a preference in favour of homebuyers, and a Trisura surety policy covered deposits, per the Endorsement of Justice Osborne, Oct. 15, 2024 (2024 ONSC 6205), paras. 9–10, 13, 29–30. By December 29, 2025, 254 Uptowns contracts had been terminated under that order, per the Ninth Report of the Receiver, Dec. 29, 2025, s. 3.2, para. 2.

The lender's bid

In that Ninth Report the receiver wrote that, while construction was ongoing, it had determined "in consultation with certain stakeholders" that the projects should be marketed for sale. Its pro-formas, prepared in consultation with KingSett, led it to anticipate for each project that unit sales would leave insufficient proceeds to repay the pre-receivership loan after priority claims, and it reported that potential lenders "have repeatedly indicated a hesitancy to provide construction financing in the context of a receivership." For Lakeview, KingSett "advised that it preferred to effectively credit bid the Lakeview Project and complete the development itself," with a view to improving recoveries through lower financing costs, per the Ninth Report, s. 1.0, para. 6; s. 3.2, para. 2; s. 4.2, paras. 1–2; s. 5.2, paras. 3–4; s. 6.2, para. 1. The stalking horse carried no break fee, and the receiver wrote that "in the event that a superior transaction is identified and completed, not only would recovery be available for KingSett, but recovery would also be available for holders of subordinate claims," per the Ninth Report, s. 7.1, paras. 3(a), 6.

Justice Myers approved the sale process on January 15, 2026, and sealed the pro-formas and broker proposals, per the Sale Process Approval Order, Jan. 15, 2026, paras. 3, 6, 8. "The stalking horse bidder is the Applicant. It is credit bidding," he wrote. "The Applicant is a natural bidder if only to end the costs of the receivership," he added, per the Endorsement of Justice Myers, Jan. 15, 2026, paras. 2, 4. CBRE Limited sent its teaser to 1,390 prospective buyer contacts, and 20 parties signed non-disclosure agreements. By the March 2 deadline, no letters of interest, "let alone Qualified LOIs," had been submitted, and by April 1 there were no bids; KingSett's bid was deemed the successful one, per the Eleventh Report, s. 5.1, para. 2; s. 5.2, paras. 1–2.

The price has no single number. It is the sum of five things: what is owed at closing under the receiver's charge, approximately $2.13 million at the report's date, and under the receiver's borrowings charges for Uptowns, Heartlake and the Ravine, approximately $90.785 million at March 12, 2026; an agreed amount to fund the receiver's post-closing work; the KingSett mortgage charges, $271,276,722 at March 12, including $134,197,109 for the Lakeview charge; any priority payables; and the Lakeview mortgage held by Dorr, approximately $43,947,765, unless the purchaser assumed it. KingSett, which the receiver understands holds a first-position participation of approximately $29.9 million in the Dorr loan, satisfies the mortgage charges by releasing the vendors, and an April 8 amendment did the same for the borrowings charges, in place of a cash payment "which would otherwise need to be paid back to KingSett," per the Eleventh Report, s. 4.1.3, para. 2; s. 6.1, para. 2; s. 6.2, para. 2.

Construction lien claimants filed 23 priority claims totalling $12,334,141.21; the receiver believed the amount owed to them "may ultimately be lower." The receiver had not reviewed the validity of the subordinate mortgages registered against the land, among them a $100,000,000 charge on Lakeview in favour of Westmount Guarantee Services Inc., "given the construct of the APS and associated recoveries." The vendors' books showed approximately $17.565 million (unaudited) owed at the receivership date to other creditors, including construction contractors, professional firms and real estate brokerages, per the Eleventh Report, s. 4.2, paras. 1–2; s. 4.3, para. 1; s. 7.2, paras. 2–3, 5.