King condo complex left with tarnished crown
[TORONTO, CANADA]
By: Larry Rieger
With some facts provided by The Star, it seems that Toronto's duke of developers Harry Stinson had a business spat with his financial partner, the prince of promotion David Mirvish. The royal row left one of the city's most luxurious condominium and hotel project developments up in the air. However, this past August a judge has settled the financial disagreement by appointing a receiver to run the operation.
Stinson did not want to declare bankruptcy and opted to seek protection for two of his companies involved in the project through the Companies Creditors Arrangement Act (CCAA) filed in Superior Court in March 2007. The arrangement, which is overseen by a federal court, affords creditors some form of payment while allowing troubled companies to restructure their financial affairs. "Even though it has been humiliating to do this, I would very much like to see this resolved. We don't want the operations of this project to be jeopardized by a business disagreement," said Stinson.
But in a statement to The Star, David Mirvish said, "This matter took us by complete surprise. As the largest creditor in the group of debtors we were shocked and disappointed not to have been consulted and we stated that to the Court."
According to documents obtained by The Star, Stinson's two companies, Stinson Hospitality Inc., and Dominion Club of Canada Corp., owe more than $20 million. The secured main creditor for $11.8 million is Ed Mirvish Enterprises Inc. (David is the son of the beloved Toronto icon Ed Mirvish of Honest Ed's fame). There are also debenture holders of $5.25 million that are unsecured creditors. The uncertain future of the 1 King West condo complex was hurting some of its potential clients. The eminent Ontario Club whose heritage dates back to 1909 and whose members represent some of Canada's most prestigious and affluent business people were scheduled to move into the complex on March 1.
The 1 King West condo and hotel complex was the brainchild of Stinson. His vision was to remodel and refurbish the historical Dominion Bank building with a 51-story tower condo and hotel, while Mirvish was the financier. The hotel opened in 2005 and sold some 540 units. The Mirvish Group still owns 32 units, 3 of them penthouses that have an asking price of $6.5 million each. Stinson in his affidavit said the financial deal would mean Mirvish would receive the proceeds from the condo sales, while Stinson would be compensated through the hotel and leasing operations.
Stinson said that his action to apply to the CCAA was brought about because Mirvish demanded the $11.8 million was over due, while Stinson argued the valued amount was closer to 2 or $3 million. Obviously the judge did not agree with Stinson and chose to appoint a trustee to run it instead.
Meanwhile another problem may be brewing and could see a lawsuit ensue. The condominium's board of directors is complaining that the building was not finished to acceptable standards. Vice-president of the condo board, Brian Smith, said the property needs serious work to the windows and the insulation. The costs could be in the millions. It remains to be seen just how the dust will settle in this tangled tale of tower tenant’s tiffs.
Toronto Condos
By: Larry Rieger
With some facts provided by The Star, it seems that Toronto's duke of developers Harry Stinson had a business spat with his financial partner, the prince of promotion David Mirvish. The royal row left one of the city's most luxurious condominium and hotel project developments up in the air. However, this past August a judge has settled the financial disagreement by appointing a receiver to run the operation.
Stinson did not want to declare bankruptcy and opted to seek protection for two of his companies involved in the project through the Companies Creditors Arrangement Act (CCAA) filed in Superior Court in March 2007. The arrangement, which is overseen by a federal court, affords creditors some form of payment while allowing troubled companies to restructure their financial affairs. "Even though it has been humiliating to do this, I would very much like to see this resolved. We don't want the operations of this project to be jeopardized by a business disagreement," said Stinson.
But in a statement to The Star, David Mirvish said, "This matter took us by complete surprise. As the largest creditor in the group of debtors we were shocked and disappointed not to have been consulted and we stated that to the Court."
According to documents obtained by The Star, Stinson's two companies, Stinson Hospitality Inc., and Dominion Club of Canada Corp., owe more than $20 million. The secured main creditor for $11.8 million is Ed Mirvish Enterprises Inc. (David is the son of the beloved Toronto icon Ed Mirvish of Honest Ed's fame). There are also debenture holders of $5.25 million that are unsecured creditors. The uncertain future of the 1 King West condo complex was hurting some of its potential clients. The eminent Ontario Club whose heritage dates back to 1909 and whose members represent some of Canada's most prestigious and affluent business people were scheduled to move into the complex on March 1.
The 1 King West condo and hotel complex was the brainchild of Stinson. His vision was to remodel and refurbish the historical Dominion Bank building with a 51-story tower condo and hotel, while Mirvish was the financier. The hotel opened in 2005 and sold some 540 units. The Mirvish Group still owns 32 units, 3 of them penthouses that have an asking price of $6.5 million each. Stinson in his affidavit said the financial deal would mean Mirvish would receive the proceeds from the condo sales, while Stinson would be compensated through the hotel and leasing operations.
Stinson said that his action to apply to the CCAA was brought about because Mirvish demanded the $11.8 million was over due, while Stinson argued the valued amount was closer to 2 or $3 million. Obviously the judge did not agree with Stinson and chose to appoint a trustee to run it instead.
Meanwhile another problem may be brewing and could see a lawsuit ensue. The condominium's board of directors is complaining that the building was not finished to acceptable standards. Vice-president of the condo board, Brian Smith, said the property needs serious work to the windows and the insulation. The costs could be in the millions. It remains to be seen just how the dust will settle in this tangled tale of tower tenant’s tiffs.
Toronto Condos
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