Quote:
Originally Posted by Simplicity
Maybe.
But is that the most material reason for his stepping aside in a statement ostensibly released to update investors and purchasers in a project? It's not. It's also completely unassailable and that's the point. The release is strictly designed to obfuscate the recent developments in Barrie that have rendered Mady an untenable development partner.
The only reason this can even be gotten away with is because syndicated mortgages are going to remain the wild west until a whole pile of people get screwed.
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http://www.simcoe.com/news-story/532...from-creditors
Builder of Barrie’s Collier Centre seeks protection from creditors
One business day before Chuck Mady had to deliver Sobeys what he’d promised, he turned to the courts for protection.
The anchor tenant, Sobeys, wanted to be in its new downtown store Monday.
On Friday, Mady got some breathing room from the courts as he ceded control to court-appointed monitor Grant Thornton under the Companies’ Creditors Arrangement Act.
Documents filed with the court tell the story.
Sobeys became frustrated as word spread about construction being frozen due to tradespeople walking off the job and growing construction liens against the downtown project that includes an office tower and 82 residential condominiums.
Construction liens escalated from just less than $4 million at the end of November, which is when the project was to be finished and occupied, to more than $11 million by Dec. 31.
“The possession date was previously Nov. 28, 2014 and we then mutually agreed to an extension to Jan. 5, 2014. Recently you requested an extension to Feb. 1, 2015,” Sobeys said in a Jan. 19 letter.
“This date was tentatively accepted, provided you would deliver a revised firm construction schedule so that we may be properly coordinated with the landlord’s trades. Please note we are not able to accept subsequent request for further extensions. Please confirm you will deliver the premises on Feb. 2 and meet all related obligations in the Offer to Lease.”
Mady admitted to the courts he could not afford to continue construction without refinancing, but he needs to get the project finished because of mounting lease penalties.
Laurentian Bank began demanded a $29-million payment on Dec. 17 and warned Mady it would begin to enforce security conditions attached to its $52-million mortgage under the Bankruptcy and Insolvency Act. The balance grows by $3,740 each day.
Admitting the project is bankrupt, Mady said he has spent $51 million so far and he needs another $29 million to finish it.
He added the bank is “evaluating whether it is prepared to provide that financing.”
Mady also owes another $17 million to Olympia Trust.
He said he would like work to resume this month and have the condominium units — which do not yet have windows or electrical services — ready for occupancy by the end of 2015.
He said he also wants to finish the Collier Centre so he can begin collecting $2.59 million per month in rent from tenants, including the city, Barriston Law, Balzac’s Coffee, Druxy’s and Wildfire Steakhouse, as well as Sobeys, should it stay.
The office tower has a roof and its metal and concrete works are complete. Plumbing is complete up to the fifth floor and half the windows are installed. The heating and air conditioning system is less than half complete.
While all the 82 residential condos were sold and 68 per cent of retail and office space leased, Mady blamed the financial difficulties on cost over-runs caused by bad weather and sub-trade defaults.