Why a reverse vesting order

On September 15, 2026, Justice Myers approved a reverse vesting order that let Findev Lending Inc. take the shares of its insolvent borrower, 1682 Victoria Park Avenue Inc., and leave its unwanted debts in a new company bound for bankruptcy, then gave a third of his endorsement to whether the structure had been earned. "The RVO is an exceptional transaction structure," he wrote. "At minimum, there should be a good reason to use it." Findev had offered three, and none of them, taken singly, struck him as "a great reason to invoke the power of the CCAA to help a creditor singularly enhance its own recovery," per the Endorsement of Justice Myers, Sept. 15, 2026, para. 13.

The first was tax: keeping the company intact meant one round of land transfer tax and HST on the 65 remaining units instead of two. Saving tax is a legitimate strategy, he agreed, citing the British Columbia Court of Appeal in Peakhill, but that "does not mean that an RVO is needed just to help a single creditor save a single tax on a single transaction." To the second, that the debtor's licence to sell new homes would survive, he answered that the statute already treats receivers and monitors as licensed. On the third, the buyers' provincial HST holiday, he had "no evidence before me or even statutory or regulatory material." Then: "It may be lawful, but is it right?" per the Endorsement, paras. 14–20.

He signed the order all the same: the three reasons together "practically take an en bloc sale off the table," and no one was worse off than under "the assured failure of the debtor once the stay expires," per the Endorsement, paras. 25–26. The approval was reported here on September 16.

His demand restates the first of Justice Penny's four questions in Harte Gold Corp. (Re), 2022 ONSC 653, which applicants now answer in writing; Justice Cavanagh recited it in approving Thentia Global Systems' sale: "why is an RVO necessary in this case?" per the Endorsement of Justice Cavanagh, Aug. 24, 2026, para. 15.

Allen-Vanguard's receiver put the accepted answers in one sentence: permits or licences "difficult or impossible to assign," key agreements likewise, and tax attributes "that would otherwise be lost in a traditional vesting transaction," per the Factum of the Receiver, Sept. 21, 2026, para. 37.

Fifteen proceedings in four provinces answer the question, in orders made or motions filed between April and September 2026; thirteen motions have been decided and two are pending. Their answers fit those three grounds (a permit or licence that cannot move, or cannot move quickly; a contract that needs somebody's consent; land transfer tax on the way in, or accumulated losses an asset sale would leave behind) and add two more: a Crown deemed trust, twice, and, in six files, a buyer that would buy no other way.

Permits, licences, and how long a new one takes

Raymond Chabot, as monitor of the Mansfield and Phillips Square condominium projects, said the structure preserves "the existing construction permits and municipal authorizations required to complete the PSQ2 and Mansfield projects, which would not survive or transfer in the context of a conventional asset sale"; new permits from the City of Montréal would mean "significant delays, additional costs and potential interruptions to the ongoing construction work," per the Eighth Report of the Monitor, July 24, 2026, para. 6.19. The orders issued on July 28, per the Approval and Reverse Vesting Order (PSQ2), July 28, 2026. MNP, as receiver of the Dundarave Beachside lands, said of the original $37.2 million offer that the order was needed "to avoid triggering payment of PTT," about $1.1 million on an asset sale, and to let the buyer continue "under the existing Building Permit and Development Permit," per the Receiver's Notice of Application, July 29, 2026, paras. 18(e), 30(a). A court-ordered bidding round produced a superior offer from Basel Capital on the same structure, which the court approved on August 25, per the Supplement, Aug. 21, 2026, paras. 8–11 and the Approval and Reverse Vesting Order, Aug. 25, 2026.

Ernst & Young, as monitor of Sirona Pharma, called the RVO "the only viable means by which to sell Sirona Pharma while allowing it to retain its Licenses," citing five earlier cannabis files, per the Brief of Law of the Monitor, July 7, 2026, paras. 41–42 and n. 43; the order issued July 13, per the Approval and Reverse Vesting Order, July 13, 2026. Mera Cannabis's monitor in April and Justice Cavanagh in Entourage Health in August gave the same two reasons: the licences "would be difficult and risky to transfer in a traditional asset sale," and the structure carried "the added benefit of preserving certain tax attributes that would otherwise be lost in an asset sale," per the Factum of the Monitor, Apr. 6, 2026, para. 31(f) and the Endorsement of Justice Cavanagh, Aug. 27, 2026, para. 13(e).

Ecoideas, a health-food maker, needs Health Canada licences for about 35% of its products; moving its product numbers would take "a minimum of 30 days" and its licences "15-90 days," per the Third Report of the Proposal Trustee, June 30, 2026, paras. 13, 27–28; its order issued on July 7, per the Approval and Reverse Vesting Order, July 7, 2026. Freshstone's monitor was told that when the company sold a division before filing, the buyer took about eight weeks to replace a food licence, per the Third Report of the Monitor, Sept. 15, 2026, para. 79. Allen-Vanguard's Controlled Goods registration cannot be assigned, and a new one "can take up to one year due to backlog," per the Factum of the Receiver, para. 38. Sold as shares, the Teal Jones company holding Tree Farm Licence 46 keeps it and the buyer notifies the Ministry of Forests after closing; an asset transfer would face "consultation and approval processes that are outside the control of the parties," per the Twenty-Ninth Report of the Monitor, Aug. 6, 2026, paras. 167–170.

Under Cleo Energy Corp (Re), 2025 ABKB 621, Blue Sky Resources' receiver told the Alberta court, claimed licence-transfer delays "must be substantiated with specificity"; it listed them: assets under an Alberta Energy Regulator suspension order, licences in three provinces, transfers that "would take a number of months," per the Bench Brief of the Receiver, June 5, 2026, paras. 35–38; the order was pronounced on June 12, per the Transaction Approval and Reverse Vesting Order, June 12, 2026.