Cresford condo sites move toward potential sale, purchasers face uncertainty
Months after three major Cresford condominium projects entered receivership, the process is underway to potentially sell the troubled developer’s sites.
Last week, PricewaterhouseCoopers (PwC), the appointed receiver of the luxury new construction projects, filed a report with the Ontario Superior Court of Justice with a motion requesting the approval for the proposed Sale and Investor Solicitation Process.
As per an online update issued from PwC, a motion to hear the order to approve the SISPs for the developments, Halo Residences, 33 Yorkville and The Clover on Yonge, will take place later this week. The receivers will also seek approval for other items, including the execution of stalking horse agreements on The Clover and The Halo.
Jillian Siskind, the Principal Counsel of Jillian M. Siskind & Associates, a boutique law firm which specializes in construction and real estate litigation, explained to Livabl that stalking horse agreements are used in bankruptcies to avoid low-ball offers when buying the assets of the company. The stalking horse offer sets the lowest bid, meaning any subsequent bid needs to be at least as high as it is.
“It appears that PwC is inviting a potential purchaser to make an offer to purchase the assets. This offer will act as a reserve bid, which means that all other bids must be higher,” said Siskind. “It appears that the receiver is looking to sell the assets, which is sensible since they are trying to help pay the creditors and manage the bankruptcy.”
In late March, Cresford’s luxury downtown projects entered receivership. Between the three developments, approximately 1,805 buyers entered into purchase agreements. Around $252 million in deposits were provided for the agreements, according to PwC.
The high-rise buildings are at various stages of construction, totaling thousands of residential units — 33 Yorkville consists of two towers, reaching 71 and 47 storeys, while The Clover on Yonge and Halo Residences are anticipated to top out at 44 and 45 storeys, respectively. The Clover is the closest to reaching its completion to date.
Even if sold to another entity, the outcome for Cresford’s projects and those that entered into purchase agreements has yet to be determined.
“It does not mean that the units are being sold to purchasers, but just that the assets of the projects are likely to be put on offer for a purchaser,” said Siskind. “What the ultimate purchaser of the assets does with the assets remains to be seen.”