2502511 ONTARIO CORP. and 15599563 CANADA INC.

 

Receivership – Case Updates

On 19 January 2024, on motion by Peel Condominium Corporation No. 49 (in such capacity, the “Plaintiff“) in the proceeding underway in Court File No. CV-23-00706755-0000 (the “Proceeding“) in the Superior Court of Justice at Toronto, Ontario (the “Court“), the Honourable Justice Brownstone made an order (the “Receivership Order“) providing for, among other things, the appointment of Baigel Corp. as receiver (in such capacity, the “Receiver“), without security, of certain of the assets, properties, and undertakings (the “250 Property“) of 2502511 Ontario Corp. (sometimes doing business as Land Corp) (the “Debtor“), pursuant to section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended. A copy of the Receivership Order is posted below.

The 250 Property consists of the cash, cash equivalents, investments of any kind, receivables, and monetary receipts of the Debtor, or used in relation to a business carried on by the Debtor, including all proceeds thereof.

The Receiver notes that in the Endorsement of Justice Brownstone, dated 22 January 2024, the Court confirmed that the Mareva injunction in the Proceeding granted by Justice Koehnen on 7 December 2023 (the “Mareva Order“), and extended by Justice Shin Doi on 18 December 2023, is extended until further order of the Court.

On March 6, 2024, Justice Brownstone issued an endorsement adjourning the hearing to consider, among other thing, the terms of sale of residential real property owned by Bruno Zaffino (the “Residential Property“), a defendant in the Proceeding and the sole owner, officer and director of the Debtor.

On March 13, 2024, Justice Brownstone issued an endorsement providing for, among other things, the expansion of the Receiver’s powers to include the authority to investigate the Debtor’s business and financial affairs. On March 18, 2024, Justice Brownstone made an order (the “Receivership Variance Order“) to confirm the Receiver’s expansion of powers to investigate.

On May 17, 2024, Justice Brownstone issue an endorsement providing for, among other things, a timetable for submissions and other matters in respect of the Receiver’s motion for directions to be heard on July 3, 2024.

On July 4, 2024, Justice Brownstone issued an order amending and restating the Receivership Order (the “Amended and Restated Receivership Order“), which provided, among other things, that:

  • the Receiver’s appointment be over all assets, properties and undertakings of the Debtor, and not just the 250 Property described above;
  • the Receiver’s appointment be over all assets, properties and undertakings of 15599563 Canada Inc. (“155 Inc.“), a corporation incorporated pursuant to the laws of Canada within five days of the Mareva Order being issued, with its sole registered director beingDaniel Zaffino, the son of Bruno Zaffino;
  • the Receiver’s powers and authorities are expanded to include the standard powers and authorities of a receiver, as well as confirm the authorities to redirect the mail from the registered office of 155 Inc., and the authority, but not the obligation, to make an assignment in bankruptcy on behalf of the Debtor.

Also on July 4, 2024, Justice Brownstone issued an order (the “Ancillary Matters Order“) that provided for the Court’s approval of, among other things:

  • the Receiver’s fees and disbursements from January 18, 2024, up to and including April 30, 2024;
  • the Receiver’s first and second reports to court and the activities and conduct of the Receiver described therein;
  • the Receiver’s proposed distribution of funds from the 250 Property described in the Receiver’s second report to Court dated May 10, 2024; and
  • a charge over and against the Residential Property, in favour of the the Receiver and its counsel, which charge shall not exceed an aggregate amount of $60,000, as security for fees and disbursements, and which shall rank subordinate in priority only to the registered charges of Computershare Trust Company of Canada and of HGX Financial Inc., but in priority to all other security interests, trusts, liens, charges and encumbrances, statutory or otherwise, except those statutory priorities created by section 14.06(7), 81.4(4), and 81.6(2) of the Bankruptcy and Insolvency Act.

Periodic updates and documents will be posted to this website in accordance with the Court’s E-Service Protocol.

Inquiries

Inquiries and other requests may be directed to the Receiver’s office by contacting:

Michael N. W. Baigel, FCA (UK), FIPA, CIRP, LIT
Tel: +1 (416) 224-4350
Email: baigel@baigel.ca

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