Over 400 properties could change hands as real estate firms' debts mount
Creditors are seeking ownership of more than 400 properties across northern Ontario previously owned by 11 insolvent companies, one of the largest real estate holdings in the region.
The companies, including Balboa Inc., DSPLN Inc., and Happy Gilmore Inc., owned a combined 407 properties with a total of 631 residential units spanning Timmins, Sault Ste. Marie, and Sudbury, along with smaller holdings in Kirkland Lake, Capreol, Temiskaming Shores, and Val Caron.
Initially estimated at $144 million, the companies' total debt was later assessed at about $90 million, according to KSV Advisory, the firm overseeing the companies' Creditors Arrangement Act (CCAA) proceedings. In its recent report, KSV noted that creditors have submitted bids to take over most of these properties.
"In total, the monitor received 323 credit bids, each accompanied with the required deposit," the report read.
If the court approves these bids, KSV projected that around 84 properties will remain unsold in the portfolio. The court will review these bids and motions for ownership on October 30, one day before the current stay period for legal proceedings expires. KSV has also requested an extension to this stay through November to resolve the remaining property issues.
The companies involved in the insolvency case were led by former YTV child actor Robby Clark, business owners Aruba Butt and Ryan Molony, and real estate agent Dylan Suitor. Initially, the group told investors that the properties would be renovated and sold or rented at a profit, but CCAA filings revealed questionable spending and financial practices.
Among the findings, at least $1 million was reportedly spent on unrelated luxury purchases, while high dividends were issued despite ongoing financial losses. A separate company owned by the same directors received substantial fees for managing the renovations.
In June, however, the business partners issued a statement disputing these findings, claiming that “key evidence” had been overlooked in the CCAA report.
"The vast majority of the transactions cited as 'payments' to the principals are, in fact, reimbursements for standard business expenses," the statement said.
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It further denied excessive luxury spending, calling such expenditures “related to company retreats and capital-raising activities.”
Meanwhile, some properties have been fined under the vacant property bylaw. According to local reports, multiple units in Sault Ste. Marie have been cited for violating the vacant property bylaw, while another property in Timmins, a known drug den, was recently demolished.
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