WSP Place: two years of forbearance, then a receiver

On November 24, 2022, George Schluessel, chief executive of the property manager Procura, wrote to Canada ICI Capital Corporation, which collected the mortgage payments on WSP Place, and asked it not to debit the borrowers' account on December 1. "Due to the steep rise in prime interest rate in the last 6 months, we are finding it difficult to service the debt temporarily," the letter began. "Prime interest rate has doubled since Bank of Canada started raising interest rates and we are feeling the pain as every other developer in town." A tenant, AHS, would be vacating in January 2023, "leaving behind 43,500 sqft of vacant space." He asked for a deferral to November 30, 2023, with the lender drawing on the leasing reserve in the meantime, and closed with a forecast: "We believe that leasing will come around towards the end of next year when interest rates starts to fall," per the Affidavit of Ifti Rashid, July 13, 2026, para. 35 and Ex. "V".

WSP Place is a twelve-storey office tower at the southwest corner of Jasper Avenue and 109th Street in downtown Edmonton, with 191,435 square feet of leasable space and 173 parking stalls. Luxor Land Ltd. owns an undivided two-thirds interest and Mesa West Capital Corp. the other third, under a transfer registered in December 1999. Both belong to the Procura Group, which Ifti Rashid, a director of portfolio management at MCAP Financial Corporation, describes in his affidavit as a real estate development and management enterprise Schluessel founded in 1979. Rashid puts the tower's vacancy at approximately 35% in November 2022 and approximately 85% by July 2026, per the Affidavit of Ifti Rashid, July 13, 2026, paras. 1, 3–5, 11–13, 34 and Ex. "S".

On August 14, 2026, Justice Burns of the Court of King's Bench of Alberta, sitting in Edmonton in Court File No. 2603-15449, appointed AlixPartners Restructuring, Inc. receiver and manager of the lands and tower, their rents and leases and the personal property used with them. The application came from MCAP, acting for Computershare Trust Company of Canada, which holds the loan as custodian for Real Estate Asset Liquidity Trust. MCAP puts the debt at $44,643,306.18 as of July 13, 2026, per the Receivership Order, Aug. 14, 2026, recitals and para. 2, the Notice and Statement of the Receiver, Aug. 24, 2026, para. 1 and the Affidavit of Ifti Rashid, July 13, 2026, para. 76. Four days earlier, according to Schluessel's affidavit, National Bank of Canada had obtained a limited receivership over separate lands of the same two companies, the Azure and Cascadia lands; the bank's application was reported here on August 11, per the Affidavit of George Schluessel, Aug. 12, 2026, para. 7.

A deferral, and then no payments

On November 8, 2018 the borrowers accepted a commitment letter Canada ICI issued for Computershare: $38,000,000 for five years, the rate later locked at 4.654%. Schluessel, GSRI Ltd. and Pacific Plaza Limited Partnership guaranteed it without limit, and it is secured by a mortgage, an assignment of rents and leases and a general security agreement, per the Affidavit of Ifti Rashid, July 13, 2026, paras. 19–29.

The 2022 request became an amending agreement that Rashid dates March 13, 2023, under which the borrowers would pay $100,000 a month and the lender would draw the rest of each payment from the lease reserve for nine months or until it was depleted. The reserve ran out in or around September 2023, and Rashid swears the borrowers have made no payment of principal or interest since. The loan matured on January 1, 2024. MCAP's discharge statement, prepared to July 10, 2026, shows a per diem of $10,270.37, per the Affidavit of Ifti Rashid, July 13, 2026, paras. 34, 36–42 and Ex. "JJ".

Property tax arrears on the lands stood at $1,468,700.25 on or about February 2, 2024. MCAP paid that sum on February 12 and $711,231.45 of 2024 taxes on June 28, both as protective advances added to the debt. Its counsel, Cassels Brock & Blackwell LLP, issued demands and a notice of intention to enforce security on February 15, 2024, per the Affidavit of Ifti Rashid, July 13, 2026, paras. 43–45, 50–51, 80(f).

What the forbearance reached

MCAP then entered into a forbearance agreement dated June 12, 2024 with the borrowers, the guarantors and Procura Real Estate Services Limited, under which the obligors acknowledged $38,351,667.86 of debt and MCAP agreed to hold off until a default or June 12, 2026, whichever came first. All rent from the tower's tenants was to go directly to MCAP. The borrowers were to pay $1,200,000 by the first anniversary, a 1.00% forbearance fee was added to principal, and interest ran at 7.00%, rising to 8.00% if the anniversary payment was missed. Procura was to give way to a property manager MCAP would appoint, and MCAP agreed to pay Procura $13,750 a month during the forbearance period, beginning once the new management agreement was signed and conditional on continued compliance with that clause. The obligors also delivered a signed consent receivership order, a form that named KSV Restructuring Inc. as receiver, per the Affidavit of Ifti Rashid, July 13, 2026, paras. 53–56 and Exs. "CC", ss. 2.1(c), 3.1–3.4, 3.7, and "DD".

The agreement reached past the tower. As additional security, group companies were to assign the sale proceeds of eight other properties, among them the Cascadia + Del + Brown and Azure properties and the Intact building at 10830 Jasper Avenue, with net proceeds to go to the MCAP debt up to $18,000,000 in all, and the borrowers were to assign the Paramount Block VTB, a $3,000,000 vendor take-back mortgage they held. One clause tied the parking together: if WSP Place could not park its tenants, up to 74 stalls at the Cascadia + Del + Brown property were to be made available to them, per the Affidavit of Ifti Rashid, July 13, 2026, para. 54(e) and Ex. "CC", ss. 1.1(a), 1.1(q), 3.2(b)(iv), 3.6(s).

The defaults MCAP lists, and the answers

The anniversary payment was not made. MCAP's counsel sent four notices of default, the last on June 9, 2026, and Rashid swears that most of the defaults have not been remedied. One concerns a fire on October 23, 2023. MCAP says it learned from the borrowers' insurer around August 8, 2024 that the borrowers had been paid approximately $1,101,431.40 as a cash settlement, and that the money was neither spent on repairs nor remitted under the mortgage. "I understand that the Borrowers instead misappropriated the Insurance Proceeds by injecting them into the Procura Group's portfolio of underperforming assets to service debts to other lenders," Rashid swears. MCAP also says the obligors did not disclose that they had negotiated the Paramount Block mortgage down from $3,000,000 to $1,500,000, and that Procura has not remitted the proceeds of a 2025 settlement with the tenant WSP Canada Inc., per the Affidavit of Ifti Rashid, July 13, 2026, paras. 59–70. The June 9 notice said MCAP had been made aware that Schluessel "has engaged in conduct directed at" a current tenant, including communicating with interested parties "indicating that he has attempted to induce or encourage the tenant to vacate their current premises at WSP Place," per the Affidavit of Ifti Rashid, July 13, 2026, Ex. "EE".

Duncan Craig LLP, the borrowers' counsel, answered the August 2025 notice on October 6, 2025. The borrowers and Procura denied any misleading statement about the Paramount Block mortgage and any failure to perform "in respect to the fire damage to WSP Place," and said prior defaults had been rectified within the time the agreement allowed. Schluessel's affidavit calls the tenant allegation "both inaccurate and untrue." His talks with a Government of Alberta-related tenant about moving to the Intact building, which his corporations owned until its sale in 2025, took place largely in 2018 and 2019, he says, "in the normal course, not for any ulterior purpose," and the tenant did not move, per the Affidavit of George Schluessel, Aug. 12, 2026, para. 18 and Ex. "A".