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All Cdn banks refused to finance this project(?)
According to the referenced article, all Canadian banks had refused to finance investors' purchases. I thought developers customarily demanded non-cash buyers furnish a "mortgage commitment letter" shortly after signing a deal. Accordingly, shouldn't those suing investors had realized at the beginning that this was a commercial enterprise when they were refused residential mortgage commitments? Or were the banks complicit in creating the bind that the purchasers now find themselves in, i.e. initially issuing mortgage commitment letters, and after they had expired, declared the project "commercial" and refused to renew?
With reference to the Toronto Star article, I have to agree with the judge in that while the greater public's interest is at stake but the issue at hand does not warrant an emergency hearing. This was a project with a small number of units for sale as opposed to 000s (or even millions) of shares on the open market where, incidentally, there is NO 10-day rescission period. However, if the developer can be proven to have contravened direct OSC instructions in an effort to avoid the expenses (~$1MM) related to filing a prospectus, then there are remedies in law for that. It will be August 2013 before the next hearing, and unfortunately, these remorseful buyers will have been bankrupted by then. At least the younger ones can still catch up financially; sadly those closer to retirement are truly going to suffer.
According to the referenced article, all Canadian banks had refused to finance investors' purchases. I thought developers customarily demanded non-cash buyers furnish a "mortgage commitment letter" shortly after signing a deal. Accordingly, shouldn't those suing investors had realized at the beginning that this was a commercial enterprise when they were refused residential mortgage commitments? Or were the banks complicit in creating the bind that the purchasers now find themselves in, i.e. initially issuing mortgage commitment letters, and after they had expired, declared the project "commercial" and refused to renew?
With reference to the Toronto Star article, I have to agree with the judge in that while the greater public's interest is at stake but the issue at hand does not warrant an emergency hearing. This was a project with a small number of units for sale as opposed to 000s (or even millions) of shares on the open market where, incidentally, there is NO 10-day rescission period. However, if the developer can be proven to have contravened direct OSC instructions in an effort to avoid the expenses (~$1MM) related to filing a prospectus, then there are remedies in law for that. It will be August 2013 before the next hearing, and unfortunately, these remorseful buyers will have been bankrupted by then. At least the younger ones can still catch up financially; sadly those closer to retirement are truly going to suffer.
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