TD, Scotiabank, CIBC Among Lenders Owed $53 Million by Urbancorp

  • Builder units file under Companies’ Creditors Arrangement Act
  • Urbancorp debt related to project mortgages, lines of credit

Urbancorp, the Canadian residential developer seeking bankruptcy protection on several projects as it restructures the company, owes more than C$68 million ($53 million) to lenders that include some of the country’s largest banks, court filings show.

The homebuilder filed under the Companies’ Creditors Arrangement Act on at least 12 projects, according to filings uploaded to its trustee’s website Monday. Six of those developments filed a proposal last month for bankruptcy protection, a separate process from filing under the CCAA. Monday’s filings, posted on the KSV Advisory Inc. website, disclosed debts to Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Bank of Nova Scotia, in addition to alternative lenders.

“The applicants are cash-flow insolvent and cannot meet their liabilities generally as they become due,” Alan Saskin, head of the Toronto-based developer, said in an affidavit included in the court filings. “A broad court-supervised restructuring of the Urbancorp CCAA Entities as a whole is required in order to preserve the most value for stakeholders.”

The developer, one of the country’s most active, having built 5,500 units in its 25-year history, filed for restructuring in April. Since then, it’s added several more projects to the list of insolvent entities, and is filing under CCAA for others. Saskin also is asking the court to grant protection for non-filing entities including the parent company.

Scotiabank, TD

Urbancorp owes at least C$54.6 million to Scotiabank on a C$225 million credit facility, C$5.4 million to TD and C$1.1 million to CIBC, according to Monday’s filings. The debt is related to mortgages and lines of credit across several Urbancorp projects, some which haven’t filed for bankruptcy protection, and are in addition to the approximately C$91.5 million Urbancorp owes to other creditors such as contractors and architects.

Urbancorp also made disclosures on other projects, some of which were announced in bankruptcy-protection filings last month, including C$7.4 million owed to alternative lender Atrium Mortgage Investment Corp.

The documents throw more light on a bond the homebuilder issued in Israel. Urbancorp said that of the C$64 million raised in the offering, C$58 million went to the parent company. From that amount, C$46 million went to meeting existing loan obligations and C$8 million to repaying secured loans. The bond was used for five projects, all of which have filed for bankruptcy protection and now under CCAA.

Under Urbancorp’s bankruptcy proposal, the lenders would get paid first, followed by the payment of administrative charges, reimbursement of lenders financing Urbancorp’s current day-to-day operations as well as the filing process, and Saskin’s C$300,000 payment. Israeli creditors would be last to be repaid, according to the proposal from Urbancorp.

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