A B.C. developer is facing mounting financial headaches stretching across properties throughout Metro Vancouver.
The B.C. Supreme Court has appointed a receiver to take control of a Surrey project from Burnaby-based Thind Properties Ltd., after a lender petitioned the court, claiming they were owed more than $85 million.
Thind Properties is also the subject of a separate legal proceeding related to developments in Richmond and Burnaby.
In a Nov. 8 order by judge David Masuhara, a receiver was appointed for Thind’s District Northwest project located at 13438 105A Ave. in Surrey, where the developer had planned to build two residential towers with 1,023 units near Surrey Central SkyTrain station.
This came after the lender, KingSett Mortgage Corp., petitioned the court on Oct. 11 saying Thind Properties owed them $85,695,102.47 as of Oct. 1, consisting of about $80 million of principal and about $5.6 million in interest.
Interest continued to accrue at a rate of $31,661.89 per day, according to the petition, which was made under the federal Bankruptcy and Insolvency Act.
“The indebtedness is fully due and owing and payable to KingSett and the borrowers have failed or neglected, and continue to fail or neglect, to pay,” said the petition filed by KingSett’s lawyers from Osler, Hoskin & Harcourt LLP.
In Masuhara’s order, receiver KSV Restructuring Inc. was granted various powers including the power “to take possession of and exercise control over the property” and “to manage, operate and carry on the business of the debtors.”
The petition was supported by an affidavit from Daniel Pollack, a KingSett executive who said that on May 1, Thind Properties failed to make monthly interest instalment payments. After that, KingSett attempted to work with the borrower and gave it an opportunity to restructure its financial affairs. However, KingSett then “lost confidence” in the borrower’s ability to satisfy its obligations and took steps to enforce its security.
“In KingSett’s view, the appointment of the receiver is necessary to ensure the lands are sold in an expedient manner that secures the most value,” Pollack stated.
According to BC Assessment, the two-acre parcel had a 2024 assessment value of $65,885,000 as of July 1, 2023. Technically, the borrowers were District Northwest Limited Partnership and 105 University View Homes Ltd., subsidiary entities of Thind Properties.
In its response to petition, the developer opposed the appointment of a receiver, and took issue with Pollack’s assertions.
“The innuendo left by Mr. Pollack’s affidavit is that the respondents have not latched onto opportunities to restructure their affairs … There is not a fair description of the ongoing discussions between the parties.”
Supported by an affidavit from president and CEO Daljit Thind, the developer said it needed additional time to secure new joint venture partners. Thind testified that his companies were in discussions with an unnamed third party to get on board. He also said pre-sale deposits were not at risk because the units were sold below current market value.
“The respondents are opposed to the appointment of a receiver as such appointment will wipe out all of the partnership’s equity in the property,” stated Thind, who was represented by Richards Buell Sutton LLP.
This outcome now appears likely. In appointing KSV as the receiver, Masuhara authorized KSV to sell the property on or after Jan. 18, 2025.
“Any transactions for the property are subject to court approval,” KSV noted in its court filings. “The outcome of the realization process will determine the amount available for distribution to the debtors’ creditors.”
Also on Nov. 8, KingSett initiated legal proceedings for two other Thind Properties projects to be placed into receivership. KingSett is also the lender for Thind's Highline and Minoru Square projects, and its second petition states that it is owed about $146 million and $75 million for those two projects, respectively.
According to Thind Properties' website, Highline is a project in Burnaby's Metrotown that would have 327 units, 10 floors of office space and ground-floor commercial space. Meanwhile, Minoru Square is a project in Richmond that would have 429 units and 184,423 square feet of retail and office space.
This separate petition has not yet been responded to by Thind's counsel, and a hearing has yet to take place. Because the two projects share the same principal contacts and are financially interwoven, KingSett's petition requests that they share the same receiver and that the lender's security for each project be enforced simultaneously.
According to the federal Office of the Superintendent of Bankruptcy, there were 256 bankruptcies and proposals in the real estate, rental, leasing and construction sectors under the Bankruptcy and Insolvency Act in Q3 2024, compared to 199 in Q3 2023—an increase of 29 per cent.
Factors in the shifting landscape include inflation, the steep jump in the key interest rate from 0.25 per cent in March 2022 to five per cent in June 2023, rising construction costs and permitting delays.
