1682 Victoria Park: the RVO Justice Myers approved and questioned

Colliers Macaulay Nicolls listed the sixty-five unsold townhouses at 1648–1682 Victoria Park Avenue in Toronto on June 17, 2026 at $51,550,220 before HST: two one-bedroom units, eleven two-bedrooms, fifty-two two-bedrooms with a den, and sixty-five underground parking spaces and lockers to go with them, per the affidavit of Findev Lending Inc.'s officer and director in the Motion Record of the Applicant, Aug. 28, 2026, Tab 2, paras. 9–11. The broker ran email campaigns to roughly 8,000 people, made 550 calls and signed sixteen confidentiality agreements for its data room. Nobody offered to buy, per the Second Report of the Monitor, Sept. 10, 2026, paras. 44–46. The debtor, Justice Myers wrote, "has not been able to sell a single unit since March of this year," per the Endorsement of Justice Myers, Sept. 15, 2026, para. 27.

So the lender bought the company instead. On September 15, 2026 Justice Myers approved a reverse vesting order under which Findev takes every share of 1682 Victoria Park Avenue Inc. and the debts it does not want go to a shell, 1001740770 Ontario Inc., which becomes the CCAA debtor in its place, per the Approval and Reverse Vesting Order, Sept. 15, 2026, paras. 3–4, 21–22. The endorsement that accompanies it records that he questioned Findev's lawyers "at some length" about whether the CCAA and the RVO were being used to get around statutory schemes and taxes, and it puts the question in seven words: "It may be lawful, but is it right?" per the Endorsement of Justice Myers, Sept. 15, 2026, paras. 19–20.

When the proceeding was reported here on July 25, the stay ran to October 15 and Findev meant to come back with an en bloc sale process built around a stalking horse bid. No formal sale process was approved; what came back instead, the judge noted, was a transaction preceded by "very public marketing with significant involvement by the Monitor," per the Endorsement of Justice Myers, Sept. 15, 2026, para. 29.

A price made of other people's mortgages

Findev and the monitor, signing for the debtor, executed a subscription agreement on August 28, amended on September 10. The purchase price is approximately $58,951,159.94 and is built from three pieces: about $32,834,910.31 of mortgage debt ranking ahead of Findev, which the company keeps and owes; about $25,772,018.00 of Findev's own mortgage debt, paid by credit bid; and $344,231.63 of priority payables. That last figure is $207,004.96 for the apparent deficiency in the statutory holdback on two construction liens, which the purchaser and the lien claimants agreed would stay on title as permitted encumbrances, and $137,226.67 of professional fees secured by the administration charge, per the Second Report of the Monitor, Sept. 10, 2026, paras. 16, 19(a)–(b). If the order was granted on September 15 and nobody appealed, closing would fall on September 28, per the same report at para. 19(e).

The mortgages the company keeps are Windsor Family Credit Union's first, owed $24,284,212.79, and Firm Capital Mortgage Fund's second, owed $8,550,697.52, both as of September 10; the monitor understands both lenders support the deal. Westmount Guarantee Services, the monitor understands, holds a $27,000,000 registered charge securing the debtor's indemnity for a $2,940,000 bond it issued in favour of Tarion Warranty Corporation. Behind Findev, Yonge-Abell Mortgage Partners Limited holds a fifth mortgage registered at $17,000,000; the monitor expects it to recover nothing and reports that it does not oppose, per the Second Report of the Monitor, Sept. 10, 2026, paras. 50–66.

Findev's own number carried a correction. The second report gave its registered mortgage as $4,000,000; four days later the monitor filed a supplement calling that an inadvertent error, putting the principal of the charge at $10,000,000 under instrument AT5583517 and the debt it secured at $25,780,435 as of September 9, per the First Supplement to the Second Report, Sept. 14, 2026, paras. 7–10. Findev's officer broke the credit bid down under oath: $11,570,831.38 for construction, development, legal and insurance; $12,047,006.06 of accrued interest; $271,375.12 of realty taxes; $260,505.12 of utilities, operating costs and common element fees; and $700 of statement fees, per the Supplementary Motion Record of the Applicant, Sept. 11, 2026, Tab 1, para. 4.

The monitor tested the price against two appraisals: Bottero's of all sixty-five units en bloc, and TL Smith's of four representative units, extrapolated by the monitor per square foot, each discounted 15% for an en bloc buyer's margin, and then added back the full hypothetical land transfer tax and HST that a conventional sale at those values would attract. The price, it reports, "remains substantially higher than these grossed up appraised values," per the Second Report of the Monitor, Sept. 10, 2026, paras. 24–40. The appraisals and the monitor's spreadsheets are confidential appendices, sealed by the order pending closing.

Three reasons, and the judge's answer to each

The monitor called the structure "reasonable, appropriate and necessary" and gave three grounds: the debtor's licence from the Home Construction Regulatory Authority to build and sell new homes cannot be transferred, so only a share deal keeps it; leaving title where it is preserves the Ontario new housing rebate on HST for individual buyers; and the purchaser avoids land transfer tax, per the Second Report of the Monitor, Sept. 10, 2026, paras. 47–48. On whether anyone was worse off, the monitor's aide memoire acknowledged that the transaction "does avoid certain taxes that would otherwise be payable to Ontario and Canada," noted that neither government had objected, and cited an earlier Commercial List endorsement approving an RVO with the same feature, per the Aide Memoire of the Monitor, Sept. 14, 2026, para. 12(c).

Justice Myers took the grounds one at a time. "None of them individually seems like a great reason to invoke the power of the CCAA to help a creditor singularly enhance its own recovery," he wrote; "the RVO is an exceptional transaction structure. At minimum, there should be a good reason to use it," per the Endorsement of Justice Myers, Sept. 15, 2026, para. 13.

On tax he agreed with the British Columbia Court of Appeal in British Columbia v. Peakhill Capital Inc., 2024 BCCA 246, that saving tax is a legitimate deal strategy inside or outside bankruptcy, and then drew the limit: that "does not mean that an RVO is needed just to help a single creditor save a single tax on a single transaction. The creditor may want that outcome. But that is a long way from showing that an RVO is 'necessary' or a fair and proper use of the restructuring laws in the public interest," per the Endorsement of Justice Myers, Sept. 15, 2026, paras. 14–15.

On the licence, he pointed to s. 47(2) of the New Home Construction Licensing Act, 2017, which treats trustees, receivers and CCAA monitors as licensed, so a mortgagee enforcing its security "is not left without a remedy." He expected that a mortgagee "could team up with a licensed builder" to cover Tarion warranty work, and recorded that there was no evidence before him on whether parties can work with Tarion to protect the statute's intention while leaving a mortgagee flexibility, per the Endorsement of Justice Myers, Sept. 15, 2026, paras. 16–17. He also asked whether the debtor, which will no longer be a developer or builder of homes, would qualify for a new-home licence "without experienced construction management and an active construction business," per the Endorsement of Justice Myers, Sept. 15, 2026, para. 19.