Real estate moguls face mounting lawsuits
Three Ontario landlords facing financial turmoil over $144 million in unpaid loans have secured court-ordered protection against creditors' legal actions until the end of March 2024, according to documents filed with the Ontario Superior Court of Justice.
The trio – Dylan Suitor, Ryan Molony, and Aruba Butt – who collectively own over 400 rental properties across Ontario, have declared their 11 corporations insolvent as they face a severe "liquidity crisis" with debts exceeding $144 million.
The documents reveal the group has been granted creditor protection from more than 300 lenders under the Companies Creditors Arrangement Act (CCAA) until the end of March 2024.
The ruling has temporarily halted the 32 lawsuits filed against them, allowing the landlords a chance to salvage their business despite reportedly having only $100,000 in their coffers. The affected properties span across Timmins, Sault Ste. Marie, Sudbury, and other locales housing over 1,000 tenants across 406 units.
This financial turmoil has left over 200 rental units vacant, resulting in a potential monthly revenue loss of $350,000. In addition to the massive loan debt, the corporations are also burdened with $2.8 million in unpaid municipal taxes, utility bills, corporate income taxes, $600,000 owed to contractors and service providers, and $55,000 in federal payroll deductions.
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The court has granted the landlords access to a $12-million loan for covering legal proceedings and completing property renovations, with plans for comprehensive refinancing or restructuring and negotiating a "consensual plan of compromise" with their lenders.
Legal experts suggest that the success of the landlords' efforts to recover will largely depend on the willingness of the 300 lenders to cooperate. Meanwhile, tenants residing in these properties are assured of their rights to remain in their homes, despite the ongoing financial restructuring and potential ownership changes, unless otherwise ordered by the court.
"It's not that uncommon, but it does create this really complicated corporate structure where you have multiple companies and multiple lenders, and sometimes the links between them are hard to unravel," Calgary-based lawyer Karen Fellowes told CBC News.
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