ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) (IN BANKRUPTCY AND INSOLVENCY)

Transcription

1 ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) (IN BANKRUPTCY AND INSOLVENCY) Court File No Estate File No IN THE MATTER OF THE NOTICE OF INTENTION TO MAKE A PROPOSAL OF ALANSASKIN FIRST REPORT TO THE COURT OF THE FULLER LANDAU GROUP INC. IN ITS CAPACITY AS TRUSTEE UNDER THE NOTICE OF INTENTION TO MAKE A PROPOSAL OF ALAN SASKIN INTRODUCTION MAY 24, On April 29, 2016, Mr. Alan Saskin ("Mr. Saskin") filed with the Official Receiver a Notice of Intention to Make a Proposal ("NOI''), pursuant to subsection 50.4(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the "BIA''). On the same date the Office of the Superintendent of Bankruptcy confirmed the filing. The Fuller Landau Group Inc. was named as proposal trustee ("FL" or the "Proposal Trustee") under the NOI. 2. Mr. Saskin has attempted over a number of months to reach informal settlements with certain creditors but without overall success. As well, as a result of various restructuring proceedings of entities owned directly or indirectly by Mr. Saskin, litigation including proceedings in Israel, and Construction Lien Act (Ontario) breach of trust claims, Mr. Sasksin required a stay of proceedings in order to bring stability to his personal creditor situation. The principal purpose of these proceedings is to create a stabalized environment to allow Mr. Saskin to formulate and implement a workable proposal to his creditors in light of the ongoing corporate restructurings. 3. A copy of the notice of the NOI (the "Notice") and related documents was mailed to all known creditors by the Trustee on May 6, 2016.

2 On May 9, 2016, the Cash-Flow Statements, the Insolvent Person's Reports on Cash-Flow Statements, and the Trustee's Report on Cash-Flow Statements for Mr. Sasksin was filed with the Official Receiver. PURPOSES OF THIS REPORT 5. The purposes of this first report (the "First Report") are to: a. provide the Court with background information regarding Mr. Saskin' s circumstances and the filing of the NOI; b. update the Court with respect to the Mr. Saskin's receipts and disbursements; c. provide the Court with the Proposal Trustee's recommendation that the Court make an Order approving Mr. Saskin' s request to extend the time for filing a proposal to July 11, 2016; 6. In preparing this Report, the Proposal Trustee has relied on discussions with Mr. Saskin and his lawyers and accountants and the review of certain documents provided by these parties. Some of the information used in preparing this Report consists of financial projections. The Proposal Trustee cautions that these projections are based upon assumptions about future events and conditions that are not ascertainable. Mr. Saskin's actual cash flows may vary from the Cash Flow Projection, even if the hypothetical and probable assumptions contained therein materialize, and the variations could be significant. BACKGROUND 7. Mr. Saskin is the president and shareholder of Urbancorp Holdco Inc., which in turn owns 100% of Urbancorp Inc., a real estate development company that owns numerous corporate entities, including general partnerships, limited partnerships and corporations (collectively, the "Urbancorp Group"). Mr. Saskin founded the Urbancorp Group's real estate development business in The Urbancorp Group generally uses single purpose project specific corporations to engage in the development, construction and sale of residential properties in the greater Toronto area.

3 As noted in Mr. Saskin's affidavit dated May 20, 2016, in April 2016, certain of the companies controlled by and owned indirectly by Mr. Saskin filed NOis naming KSV Kofman Inc. as proposal Trustee. Most of those proceedings were converted to proceedings under the Companies' Creditors Arrangement Act ("CCAA"), and several additional companies in the Urbancorp Group were added as applicants under the CCAA. In addition, Urbancorp Inc. is subject to court proceedings in Israel, which commenced on or about April 24, 2016 pursuant to an Order of the Israeli Court which subsequently has been recognized by the Ontario Superior Court of Justice ("Commercial List"). 9. Certain other companies within the Urbancorp Group, namely Bosvest Inc. ("Bosvest"), Edge Residential Inc. ("Edge Residential") and Edge on Triangle Park Inc. ("Edge Triangle") have filed NOis naming FL as Proposal Trustee and these filings are addressed in a separate report of FL. As well, on May 20, 2016, Urbancorp Cumberland 2 GP Inc. and Urbancorp Cumberland 2 L.P. filed NOis naming FL as proposal trustee, as it came to light after filing the NOis for Bosvest, Edge Residential and Edge Triangle that pursuant to declarations of trust, the beneficial interests in the properties held by Edge Residential and Edge Triangle are ultimately held by Urbancorp Cumberland 2 L.P. Notwithstanding the declarations of trust, FL has been advised by Urbancorp Group's management that the assets of Edge Triangle and Edge Residential remain available to satisfy their indebtedness to their respective creditors. 10. In addition to owning 100 common shares of Urbancorp Holdco Inc., we are advised Mr. Saskin also owns 100% of the common shares of the Urbancorp Toronto Management Inc. ("UTMI"), and all or substantially all of a limited partnership TTC!Urbancorp (Bay) LP, as well as the common shares of Ontario Inc., Urbancorp (Eastern) Inc., Urbancorp (Logan) Inc. Urbancorp (National) Inc., Urbancorp (Yonge) Developments Inc., and Urbancorp (Downtown) Developments Inc. The Proposal Trustee is in the process of compiling of detailed listing of all of Mr. Saskin's shareholdings and the information herein may be subject to revision. 11. Mr. Saskin is facing a number of claims and lawsuits including a class action lawsuit, breach of trust claims under the Construction Lien Act (Ontario) and direct claims to creditors for money borrowed by way of promissory notes. As well, Mr. Saskin has personally guaranteed

4 -4- a substantial portion of the Urbancorp Group's indebtedness. As such, many of his creditors will be participants under the various proposals or plans which may be presented by the Urbancorp Group. Accordingly, the actual indebtedness which Mr. Saskin may be dealing with in his personal proposal will vary with the recoveries under such proposals or plans. CASH FLOWS 12. On May 9, 2016, the Proposal Trustee filed the cash flow projection and related reports required by s.50.4(2) of the BIA (the "Cash Flow Projection") and a copy is attached as Appendix "A". The Cash Flow Projection covers the period April 30, 2016 to July 30, Currently, Mr. Saskin has no monthly income and all of his personal expenses are paid by either his spouse or by family trusts in which Mr. Saskin is not the beneficiary. 14. In light of Mr. Saskin's personal financial circumstances and the manner in which his personal expenses are paid, the Cash Flow Projection has no forecast receipts or disbursements. EXTENSION OF TIME FOR FILING A PROPOSAL 15. In light of the ongoing restructurings under the BIA and CCAA of many entities of the Urbancorp Group, Mr. Saskin's proposal will be in part dependent on the various outcomes of the BIA and CCAA proceedings. As such, Mr. Saskin is seeking a 45 day extension of the time permitted to file a Proposal under the BIA to allow him to better understand the possible outcomes from these various proceedings and to provide time to formulate a proposal for presentation to his creditors taking into account these outcomes. 16. The Proposal Trustee supports Mr. Saskin's request for an extension and based on its involvement in this matter to date is of the opinion that: a. Mr. Saskin has acted and is acting in good faith and with due diligence;

5 - 5- b. the extension will allow additional time to understand the various outcomes of the BIA and CCAA proceedings and litigation and Mr. Saskin would likely be able to make a viable proposal if the extension being applied for is granted; and c. no creditor will be materially prejudiced if the extension being applied for is granted. RECOMMENDATION 17. Based on the foregoing, the Proposal Trustee recommends that this Court make an Order granting a 45 day extension of the time permitted for Mr. Saskin to file a Proposal. All of which is respectfully submitted on this 24 1 h day of May, THE FULLER LANDAU GROUP INC. in its capacity as licensed insolvency trustee under the Notice of Intention to make a proposal of Mr. Alan Saskin d no nits g rsonal capacity