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Big Wins| Big Deals| Heart & Stroke| Lawyer Publications
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BIG WINS
Receiver's Stalking Horse Land Sale Upheld
On the heels of a very successful Receiver's liquidation of a large residential subdivision of over 1,500 lots in Bowmanville in early 2011, Madam Justice Carole Brown recently upheld the propriety of a power of sale process completed by a privately appointed Receiver, utilizing a "stalking horse" bid to set the minimum purchase price for bidders. Her decision granting summary judgment to the Bank of Montreal and CIBC (the "Lenders") was released on August 17, 2011.
David Taub successfully obtained a Judgment against the borrower and guarantor. The lenders realized on their security for the deficiency resulting after applying the net sale proceeds of a gross sale price of $17,700,000 against their outstanding indebtedness. At issue in the summary judgment motion brought by the plaintiffs, was the propriety of a $400,000 breakage fee paid to a stalking horse bidder. That bidder had previously guaranteed the Lenders an excellent sale price, by making an unsolicited offer prior to the receiver formally seeking any bids. In order to keep the bid alive while it pursued other offers, the Receiver agreed to the breakage fee. With the stalking horse bid in hand, the Receiver, in its bidding process, could negotiate for a much higher purchase price with another purchaser than that of the stalking horse offer and accordingly, the breakage fee was paid.
The court agreed that the Receiver's use of the stalking horse bid process as insurance before the marketing process began was reasonable including the payment of the breakage fee as a result. The court therefore granted a deficiency judgment for nearly $500,000 plus costs of almost $100,000 in favour of the 2 Lenders. The case is noteworthy because this was the first time that the stalking horse bid process was used in a private receivership of the sale of land and its use was upheld by the court.
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BIG DEALS
$18M Land Sale in Clarington
Real estate partners, Leor Margulies and Peggy Spadafora, and senior law clerk, Helen Wright, of Robins Appleby & Taub LLP, completed a sale in February 2011 under power of sale on behalf of the Bank of Montreal and CIBC, of a large development tract of land in Clarington comprising over 1,500 potential residential lots. The sale price was just under $18M and included a sizeable Vendor Take-Back Mortgage. The sale was completed pursuant to a public RFP but was backstopped by an unsolicited "stalking horse " bid which had been received by the lenders from another purchaser in advance of the RFP. The stalking horse bid guaranteed a minimum price in the lenders' hands, subject to payment of a breakage fee in the event the lenders chose to accept a higher bid. As a result, the lenders were able to secure a significantly more attractive bid for the property.
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HEART & STROKE
The Big Bike Program
The Big Bike program sponsored by The Heart and Stroke Foundation makes a big difference for all Canadians, funding vital research to reduce the risk of heart disease and stroke. Robins Appleby & Taub LLP had the opportunity to ride the Big Bike through the financial district on August 19th and almost doubled our fundraising goal of $2000. It was fun to ride this large bike as a team and show support for a great cause.
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LAWYER PUBLICATIONS
The Obligation to Return a Tenant's Deposit - The Importance of a Properly Worded Rental Application
Darrell Gold is authoring a bi-weekly column entitled the "Legal Corner" for Property Biz Canada Online Magazine. The magazine is published twice a month and can be delivered to your email by registering at Property Biz Canada. Darrell’s first article The Obligation to Return a Tenant's Deposit – The Importance of a Properly Worded Rental Application can be read here►
Termination Trap
Barbara Green recently published an article for the Ontario Home Builder Magazine on the Termination Trap. You may not be off the hook for long term disability. To review the full article, click here►
Toronto Bubble
Leor Margulies recently published an article for the Ontario Home Builder Magazine on the hot topic of the Toronto Bubble. Everyone is talking about the condo market, is it still booming or ready to bust? To review the full article, click here►
Canadian Capital Magazine
David Shlagbaum has been appointed to the Advisory Council of Canadian Capital Magazine, a newly launched quarterly publication of Rogers Publishing Limited, devoted to wealth preservation, transition and succession planning. The Canadian Capital Advisory Council is a panel of professionals with expertise in business succession, wealth planning and legacy crafting, assembled by Rogers to provide input and advice to the editors as they explore and present critical topics of interest in these areas to their readership.
Proposed Legislative Changes Aim to Curtail Tax Deferral by Corporate Partners
Wesley Isaacs recently wrote an article on the new proposed Legislative tax changes aimed to curtail deferral by corporate partners. To review the article, click here►
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LAWYER AWARDS
Family Firm Institute
At the 25th Anniversary Conference held in Boston, David Shlagbaum, was awarded a Certificate in Family Business Advising by the internationally recognized Family Firm Institute. FFI is an international professional membership organization dedicated to understanding and working with family owned businesses and the family wealth field. David is one of only 200 certificate holders from 27 countries worldwide (23 in Canada). David is also a member of the Board and the immediate past president of FFI's Ontario Chapter.
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SOCIAL MEDIA
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Robins Appleby & Taub LLP has gone social!
@RobAppTaubLLP Follow us on Twitter and receive up to the date news and notices. We would love to hear from you.
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The comments contained in this article provide general information only and should not be relied upon as legal advice. Further particulars on the matters summarized in this report, their implications and suggested courses of action, can be obtained from Robins Appleby & Taub LLP using the contact information provided herein.
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