YSL Residences Inc. was the registered owner of the real properties municipally known as 363-391 Yonge Street and 3 Gerrard Street East, Toronto, Ontario (the “Real Property”), acting as a bare trustee and nominee of, for and on behalf of the YG Limited Partnership (the “Partnership”). The Partnership was the beneficial owner of the Real Property and was formed for the purpose of developing the Real Property into a mixed-use office, retail and residential condominium development comprised of approximately 1,100 residential units, 190,000 square feet of commercial/retail/institutional space and 242 parking spaces known as Yonge Street Living Residences (the “YSL Project”).
Due to liquidity and other issues, the construction of the YSL Project had been suspended for more than a year and it had not completed the excavation and shoring stage.
The YSL companies commenced insolvency proceedings by filing Notices of Intention to Make a Proposal and naming KSV as the Proposal Trustee. The principal purpose of the proceedings was to create a stabilized environment to allow the companies to present a proposal that provides creditors with a recovery greater than they would receive in a bankruptcy or alternative insolvency process. At the time of filing, the YSL companies estimated that their obligations exceeded $300 million.
KSV coordinated the restructuring process with the YSL companies, the Proposal sponsor, being an entity related to Concord Adex Inc., and other stakeholders, including creditors holding registered liens against the Real Property. The YSL companies filed a Proposal, which was amended several times, ultimately leading to unanimous acceptance by the creditors and approval by the Court. The Proposal was implemented almost immediately thereafter with the expectation that creditors could receive full recoveries on their claims and potentially residual value for the limited partners holding units in the Partnership.