Court approves sale of over 100 Timmins properties owned by insolvent landlords

The real estate empire built by a group of insolvent, out-of-town landlords linked to SID Developments — including dozens of properties in Timmins and northern Ontario — is now in the process of being sold off as the result of ongoing insolvency proceedings.

Ontario Superior Court Justice Peter J. Osborne has officially endorsed an order approving the sale of 323 properties to secured lenders through the credit bid process, which allows those with first and second mortgages to bid the face value of their secured debts on the properties being liquidated. The properties being sold off in the credit bid process account for 79 per cent of the insolvent landlords’ portfolio.

A total of 143 properties in Timmins and 18 properties in Kirkland Lake are expected to be acquired by new owners in the process.

The majority of the properties are being bought up by Big North Capital Inc., a vehicle created by a group of secured lenders to finance and hold numerous properties.

In his Dec. 6 endorsement, Osborne acknowledged the “significant” number of people who have been “adversely affected by this entire situation.”

“In approving the transactions as I am doing today, the court is not for a moment condoning the actions and events that led to the unfortunate situation in which all affected stakeholders find themselves today,” he wrote.

“As noted, however, I am satisfied that approving the relief sought today represents the best and most advantageous path forward and maximizes outcomes and recoveries in challenging circumstances.”

Once the sales are finalized, there will be just 84 properties remaining in the landlords’ portfolio — a small fraction of the rental properties that a group of corporations linked to SID Developments acquired amid falling house prices during the COVID-19 pandemic.

The now-insolvent landlords — Dylan Suitor, Ryan Molony, former YTV child actor Robby Clark and his wife Aruba Butt — collectively owned more than 600 rental units across Ontario, including the Sault, Sudbury and Timmins.

In all, there are 11 insolvent corporations that are part of a complex corporate web closely linked to SID Developments, which Clark founded with the goal of building a real estate empire by acquiring hundreds of properties in distressed real estate markets in Ontario. Court documents have revealed that the majority of the group’s real estate holdings were made possible with the aid of 500 mortgages and 800 promissory loan notes.

The landlords filed for protection from numerous lenders in January, claiming $144 million in debt and less than $100,000 in the bank. The court-ordered protection also extends to more than 30 civil lawsuits against the group of insolvent corporations, with eight of the suits filed in the Sault alone.

A subsequent investigation by the court-appointed monitor overseeing the insolvency proceedings concluded the landlords “diverted, misused or misappropriated funds” borrowed from lenders — with some of it covering a number of extravagant purchases such as private jets, luxury hotels and a $5,000 tab at a Miami strip club — while struggling to pay municipal taxes, utility bills and contractors.

Creditor protection for Butt, Clark, Molony and Suitor has been extended until Feb. 28, 2025, to give KSV Restructuring time to close the sale of the 323 properties, as well as to work with stakeholders to formulate and implement a liquidation plan for the remaining properties in the portfolio.

The receiver for Lion’s Share Group Inc. — the lender on 602 of the promissory notes used to help fund the insolvent landlords’ real estate empire — is now seeking a bankruptcy order against Suitor. The receiver claims that Suitor owes Lion’s Share roughly $23 million, according to court documents, but Suitor contends that his true debt to the lender is $2.6 million.

Suitor has contested that bankruptcy order, with the matter scheduled to be heard in Ontario Superior Court in February of next year.

Here is a list of the properties that are being sold off in Timmins as part of the credit bid process, as of Dec. 17: