TheKingEast
Senior Member
Can someone explain to me what this means? Dumb it down. Fighting a terrible cold right now....
Toronto 422 Wellington West | 14.33m | 2s | Allied | ERA Architects
- Thread starter interchange42
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Dr. Snoot
Active Member
I don't know the entire background of this development or the court proceedings (only what I have read on this forum), but my take of the letter is, in summary:
-- The Lenders loaned money to the Borrower, Wellington House Inc. (the corporation created to develop the building)
-- At some point, for some reason or another, the Lenders or another party sought to have a Trustee appointed by the court to oversee their loans, and they also had counsel appointed to represent their interests
-- The Trustee appointed by the court was FAAN, who wrote this letter
-- The Trustee says it is responding to a Christmastime letter written by Lamb, on behalf of the Borrower, to the Lenders, in which Mr. Lamb offers to pay the lenders less than the face value of their loans and requests a vote
-- The Trustee says the letter misrepresents materials facts, will pay the Lenders only 31% of the face value of their loans, and that the offer itself is improper because it was not made through the Trusee (appointed by the court)
This is the equivalent of a legal slam letter advising the Lenders that Lamb is trying to pull the "wool" over their eyes, so to speak.
Without knowing the background, I cannot say whether this comes because the Borrower is in deep financial trouble, or this is just another form of commercial dealing. However, the presence of a court-appointed Trustee and representative counsel for the Lenders is.... telling.
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.dwg
Active Member
Damn, that would make an amazing motto for him.
LAMB: Pulling the wool over your eyes
LAMB: Pulling the wool over your eyes
ProjectEnd
Superstar
400WellingtonGuy
Active Member
Is anyone actually surprised at Brad's "generosity" ? We're still waiting for the friggin' LPAT ruling from the hearing that ended in November 2018. 14 months and counting.
400WellingtonGuy
Active Member
Lawyers for Fortress investors criticize ‘inappropriate’ offer from developer Brad Lamb
Shane Dingman
Lawyers representing investors in syndicated mortgages of the failed lender Fortress Real Developments Inc. are urging their clients not to respond to an “inappropriate” financial offer from condominium developer Brad Lamb.
On December 20, a number of investors received e-mails from Mr. Lamb’s company about loans connected to two downtown Toronto developments that remain mired in preconstruction planning delays. The messages told investors they had until January 6 to vote on the offer.
George Benchetrit, partner in Chaitons LLP, one of the court-appointed lawyers for thousands of investors caught up in the financial failure of Fortress, once Canada’s largest syndicated mortgage company, said the Lamb offer could see investors lose 70 per cent of the value of their original investment.
“I think it’s just a ploy to try to take advantage of the situation," Mr. Benchetrit said. He said some of the individual investors, "have invested in some cases all of their retirement savings.”
The messages prompted a scathing response from FAAN Mortgage Administrators Inc., the court-appointed receiver that is negotiating to secure repayment for the thousands of Canadians that invested in mortgages connected to 45 different building projects financed in part by Fortress affiliate Building & Development Mortgages Canada Inc. (BDMC).
In its message, a copy of which has been obtained by The Globe and Mail, FAAN told investors that Mr. Lamb made his approach “without consulting the trustee or representative counsel and without authorization from the court and, in the trustee’s view, likely contravenes the orders of the court in the BDMC proceedings.”
At its height, Fortress raised more than $900-million from 14,000 individual investors, promising safe returns. But many of the company’s projects have run into financial trouble and in all cases interest payments have stopped completely. In November, FAAN reported to the court it has recovered $63.4-million for the benefit of the investors, though it acknowledged many investors will continue to “suffer a devastating financial impact from their investments in Fortress projects through BDMC.”
Mr. Benchetrit, who has helped investors recover millions of dollars so far, said none of the other borrowers has done anything like Mr. Lamb’s gambit.
“It’s unique. We think it’s wrong, and we don’t want to set a pattern here that other people think this is the proper way to do things,” he said. “I think what’s happened is he’s frustrated, or if you’re more cynical your perspective might be that he’s just trying to get around FAAN … to get directly to investors to try to convince them that the offer he is making to them is in their best interest. FAAN disagrees, as do I.”
Representatives for Mr. Lamb said he was out of the country and unavailable to respond to requests for comment.
FAAN has previously negotiated repayments of BDMC loans from Mr. Lamb’s companies for two different projects: In 2018, Lamb Development Corp. paid $15.5-million out of $15.9-million in principal owed on a loan for the Harlowe project, and $2.7-million in interest, a settlement that fell short of the more than $20-million owed to 303 individuals. In April, 2019, Lamb paid $4.8-million to settle a $5.7-million BDMC loan owed to 130 parties on the Woodsworth project.
FAAN declined to specify Mr. Lamb’s complete offer, but said it represented barely 31 per cent of the $7.7-million owed to 139 individual lenders on Wellington House (422 Wellington St. W.). On Bauhaus (a proposed 218-unit condo project at 284 King St. E.), Lamb owes 110 BDMC investors at least $6.6-million. In both projects, Mr. Lamb has sent letters seeking permission to cancel contracts and return deposits to preconstruction buyers of some of the condo units as construction and planning delays have extended for years.
In the email messages investors forwarded to FAAN and Chaitons, Mr. Lamb argues that the money his company has invested into the projects should rank ahead of the BDMC loans, a legal claim Mr. Benchetrit calls “nonsense.” FAAN’s letter calls these assertions “self-serving” and warns there are “material omissions” and the approach itself is a “deviation” from typical court proceedings, as such it commits not to act on anything investors might say in response to Mr. Lamb’s letter.
Mr. Lamb’s companies have until 2021 and 2022 to repay the outstanding loans, unless an earlier settlement that could gain FAAN and investor approval can be found.
Shane Dingman
Lawyers representing investors in syndicated mortgages of the failed lender Fortress Real Developments Inc. are urging their clients not to respond to an “inappropriate” financial offer from condominium developer Brad Lamb.
On December 20, a number of investors received e-mails from Mr. Lamb’s company about loans connected to two downtown Toronto developments that remain mired in preconstruction planning delays. The messages told investors they had until January 6 to vote on the offer.
George Benchetrit, partner in Chaitons LLP, one of the court-appointed lawyers for thousands of investors caught up in the financial failure of Fortress, once Canada’s largest syndicated mortgage company, said the Lamb offer could see investors lose 70 per cent of the value of their original investment.
“I think it’s just a ploy to try to take advantage of the situation," Mr. Benchetrit said. He said some of the individual investors, "have invested in some cases all of their retirement savings.”
The messages prompted a scathing response from FAAN Mortgage Administrators Inc., the court-appointed receiver that is negotiating to secure repayment for the thousands of Canadians that invested in mortgages connected to 45 different building projects financed in part by Fortress affiliate Building & Development Mortgages Canada Inc. (BDMC).
In its message, a copy of which has been obtained by The Globe and Mail, FAAN told investors that Mr. Lamb made his approach “without consulting the trustee or representative counsel and without authorization from the court and, in the trustee’s view, likely contravenes the orders of the court in the BDMC proceedings.”
At its height, Fortress raised more than $900-million from 14,000 individual investors, promising safe returns. But many of the company’s projects have run into financial trouble and in all cases interest payments have stopped completely. In November, FAAN reported to the court it has recovered $63.4-million for the benefit of the investors, though it acknowledged many investors will continue to “suffer a devastating financial impact from their investments in Fortress projects through BDMC.”
Mr. Benchetrit, who has helped investors recover millions of dollars so far, said none of the other borrowers has done anything like Mr. Lamb’s gambit.
“It’s unique. We think it’s wrong, and we don’t want to set a pattern here that other people think this is the proper way to do things,” he said. “I think what’s happened is he’s frustrated, or if you’re more cynical your perspective might be that he’s just trying to get around FAAN … to get directly to investors to try to convince them that the offer he is making to them is in their best interest. FAAN disagrees, as do I.”
Representatives for Mr. Lamb said he was out of the country and unavailable to respond to requests for comment.
FAAN has previously negotiated repayments of BDMC loans from Mr. Lamb’s companies for two different projects: In 2018, Lamb Development Corp. paid $15.5-million out of $15.9-million in principal owed on a loan for the Harlowe project, and $2.7-million in interest, a settlement that fell short of the more than $20-million owed to 303 individuals. In April, 2019, Lamb paid $4.8-million to settle a $5.7-million BDMC loan owed to 130 parties on the Woodsworth project.
FAAN declined to specify Mr. Lamb’s complete offer, but said it represented barely 31 per cent of the $7.7-million owed to 139 individual lenders on Wellington House (422 Wellington St. W.). On Bauhaus (a proposed 218-unit condo project at 284 King St. E.), Lamb owes 110 BDMC investors at least $6.6-million. In both projects, Mr. Lamb has sent letters seeking permission to cancel contracts and return deposits to preconstruction buyers of some of the condo units as construction and planning delays have extended for years.
In the email messages investors forwarded to FAAN and Chaitons, Mr. Lamb argues that the money his company has invested into the projects should rank ahead of the BDMC loans, a legal claim Mr. Benchetrit calls “nonsense.” FAAN’s letter calls these assertions “self-serving” and warns there are “material omissions” and the approach itself is a “deviation” from typical court proceedings, as such it commits not to act on anything investors might say in response to Mr. Lamb’s letter.
Mr. Lamb’s companies have until 2021 and 2022 to repay the outstanding loans, unless an earlier settlement that could gain FAAN and investor approval can be found.
Kenojuak
Active Member
The appeal has been dismissed in full. File is attached as a PDF. And here is a transfer link (will expire): https://we.tl/b-G0JQnEFekj
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innsertnamehere
Superstar
a rare developer "loss". I guess you win one (Bauhaus), you lose one for Lamb.
400WellingtonGuy
Active Member
Wow. Thanks Kenojuak. How did you get the decision? It is not posted yet and love to see the whole report.
ProjectEnd
Superstar
400WellingtonGuy
Active Member
Lots of juicy bits here in this decision which I reported on earlier which may have swayed the outcome.
Bottom line, we were told in person by Mr. Lamb at the very beginning that he could build whatever he wanted and he did not have work with this community, etc. He was boss. Hmmmmm.
Another statement of significance is the identification by the ruling that the north stretch of Wellington between Spadina and Portland is indeed an "area of special identity". This may have an impact on those other LPATs in waiting on the north side of Wellington.
"Particular consideration is required to evaluate the ‘fit’ of the proposed
development on this stretch of Wellington Street, given that it is identified as an ‘Area of
Special Identity’ in the King-Spadina Secondary Plan. Developments that are outside of
the “Area of Special Identity”, though they are important in order to establish the
planning context for this development, they do not provide a direct basis for comparison
to development on this particular stretch of Wellington Street."
"The Tribunal agrees with the position put forward by Ms.
Birchall that the proposed building offers nothing by way of public amenities or
mitigating factors to warrant the excess in height. The Tribunal finds that this is not
reflective of the principles of good planning. "
" The Tribunal finds that the insufficient setback to the north property line would
have a negative impact on the heritage building at 495 King Street to the north. The
interface between the existing heritage building and the proposed building would be
very tight and would preclude the ability to provide a contribution to the public realm at
this location and to recognize the heritage building, as required by s. 1.6 of the TBDG
described above, as well as ss. 3.6 and 4.3 of the Secondary Plan. This concern was
acknowledged by Mr. Clewes in cross-examination where he agreed that a greater
setback to the heritage building at 495 King Street would be appropriate. Similarly, Mr.
Clewes acknowledged that it would be appropriate that the westerly setback for the Slim
Jim’s be increased from 4.2 m to 5.5 m. These acknowledgements serve to raise
concerns that insufficient attention has been paid to the interface of the proposed
building with its surroundings."
"Contribution to the public realm is a theme woven through the King-Spadina
UDG and the TBDG. As was stated by Ms. Birchall and Mr. Nicholson, publicly
accessible open space is at a premium in this vicinity, and the Applicant should make
an effort to add some publicly accessible open space as part of the proposal and / or
provide connectivity to other sites. The Applicant notes that the front patio of the
restaurant will meet this objective; however, in the view of the Tribunal, this is
insufficient for the scale of the proposed building. The Tribunal notes that the boulevard
improvements would be achieved no matter what development occurs. The north-south
connection proposed through the driveway has little in the way of amenity to improve
the space. The Tribunal finds that the proposal does not sufficiently consider
improvements to the public realm."
Bottom line, we were told in person by Mr. Lamb at the very beginning that he could build whatever he wanted and he did not have work with this community, etc. He was boss. Hmmmmm.
Another statement of significance is the identification by the ruling that the north stretch of Wellington between Spadina and Portland is indeed an "area of special identity". This may have an impact on those other LPATs in waiting on the north side of Wellington.
"Particular consideration is required to evaluate the ‘fit’ of the proposed
development on this stretch of Wellington Street, given that it is identified as an ‘Area of
Special Identity’ in the King-Spadina Secondary Plan. Developments that are outside of
the “Area of Special Identity”, though they are important in order to establish the
planning context for this development, they do not provide a direct basis for comparison
to development on this particular stretch of Wellington Street."
"The Tribunal agrees with the position put forward by Ms.
Birchall that the proposed building offers nothing by way of public amenities or
mitigating factors to warrant the excess in height. The Tribunal finds that this is not
reflective of the principles of good planning. "
" The Tribunal finds that the insufficient setback to the north property line would
have a negative impact on the heritage building at 495 King Street to the north. The
interface between the existing heritage building and the proposed building would be
very tight and would preclude the ability to provide a contribution to the public realm at
this location and to recognize the heritage building, as required by s. 1.6 of the TBDG
described above, as well as ss. 3.6 and 4.3 of the Secondary Plan. This concern was
acknowledged by Mr. Clewes in cross-examination where he agreed that a greater
setback to the heritage building at 495 King Street would be appropriate. Similarly, Mr.
Clewes acknowledged that it would be appropriate that the westerly setback for the Slim
Jim’s be increased from 4.2 m to 5.5 m. These acknowledgements serve to raise
concerns that insufficient attention has been paid to the interface of the proposed
building with its surroundings."
"Contribution to the public realm is a theme woven through the King-Spadina
UDG and the TBDG. As was stated by Ms. Birchall and Mr. Nicholson, publicly
accessible open space is at a premium in this vicinity, and the Applicant should make
an effort to add some publicly accessible open space as part of the proposal and / or
provide connectivity to other sites. The Applicant notes that the front patio of the
restaurant will meet this objective; however, in the view of the Tribunal, this is
insufficient for the scale of the proposed building. The Tribunal notes that the boulevard
improvements would be achieved no matter what development occurs. The north-south
connection proposed through the driveway has little in the way of amenity to improve
the space. The Tribunal finds that the proposal does not sufficiently consider
improvements to the public realm."
karledice
Senior Member
Wondering whats gonna happen to the old house now. Hoping someone can reno it for a nice restaurant
Kenojuak
Active Member
I think we will still see a tower or tall midrise of some sort on top. The LPAT decision gives big hints as to what would have to be done for the proposal to be acceptable.
400WellingtonGuy
Active Member
The proposal development signs have all been taken down this week. I suspect that Mike Emory from Allied called up Mr. Lamb on Tuesday after the decision to set up a lunch date to discuss a price. Only thing that makes sense.
Red Mars
Senior Member
Feb 7, 2020
