RAR Litigation Lawyers, led by Sara Mosadeq and Francesca Sgambelluri, successfully represented Crowe Soberman Inc., the court-appointed Receiver, in obtaining approval for the sale of developable land owned by the debtor, Elite Real Estate Club of Toronto Inc. and 2613702 Ontario Inc., despite opposition from a personal guarantor alleging impropriety in the sale process. This matter was heard on the Commercial List, which deals with complex commercial and insolvency proceedings.
Background
In December 2024, upon application by a mortgage lending syndicate consisting of 20 participants, Crowe Soberman Inc. was appointed by the Court as Receiver of all the assets, properties and undertakings of the debtor, including the developable land in question.
In April 2025, the Court approved a sales process for the land and authorized the listing agreement between the Receiver and the brokerage. The developable land was extensively marketed through MLS listings, industry outreach, social media campaigns, and direct engagement with developers. Despite these efforts, no bids were received by the initial deadline. Eventually, a single offer to purchase the property was received. The offer aligned with a subsequent appraisal and represented the best available recovery for creditors. As a result, the Receiver brought a motion seeking approval of the Agreement of Purchase and Sale between itself and the potential purchaser, recommending that the Court approve the transaction.
A personal guarantor opposed the sale, arguing that the land was undervalued and alleging collusion among the Receiver, its counsel RAR Litigation Lawyers, counsel for the investors in the debtor, the brokerage, the applicants, and the potential purchaser. The guarantor claimed the sale lacked integrity and sought to reopen bidding, obtain a new appraisal and remove the Receiver altogether.
Court’s Decision
Justice Myers found that there was no evidence of any wrongdoing by anyone associated with the proposed sale. He characterized the guarantor’s allegations as “intemperate, inappropriate, and discreditable” and found that they were based on “innuendo and conspiracy theories” without evidentiary support. Justice Myers accepted the Receiver’s recommendation and approved the sale, finding that the marketing process conducted by the Receiver complied with the Court’s order and was “robust, fulsome and fair”.
The Court noted that the applicants, who will recover less than their full debt with interest and costs, supported the sale, further demonstrating its reasonableness. In dismissing the guarantor’s requests to reopen bidding or obtain additional appraisals, Justice Myers confirmed that the Receiver acted prudently and that the process satisfied the principles set out in Royal Bank of Canada v. Soundair Corp., 1991 CanLII 2727 (ON CA), which guide courts in approving asset sales during receivership proceedings.
Takeaway
This decision reinforces that a court will generally defer to the recommendations of a Receiver, intervening only in exceptional circumstances where it is clear the Receiver has not acted reasonably, prudently, or fairly. Allegations of bias or collusion must be supported by evidence, not speculation. As Justice Myers noted, “a robust, fair marketing and sale process is the best proxy for fair market value … The market speaks with its money”.
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At RAR Litigation, our lawyers represent receivers, lenders, and stakeholders in complex commercial disputes and insolvency proceedings. Whether you are navigating contested sales or defending against unfounded allegations, our team delivers strategic, evidence-based advocacy.
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