Insolvent northern Ont. real estate group accused of misusing tens of millions of dollars
A former child actor and his business partners with major real estate holdings in northern Ontario have been facing insolvency after failing to keep up with debts meant for buying and renovating hundreds of properties.
A court-appointed monitor claimed recently that the business partners had been misusing tens of millions of dollars.
More than $144M owed by insolvent real estate investment company to lenders, including more than $1.7M to northern Ontario municipalities. (KSV Restructuring Inc.)
This insolvency battle involves a group of 11 companies with names like 'Happy Gilmore Incorporated' and 'The Pink Flamingo' and their struggle to pay back hundreds of loans and investments, totalling more than$144 million.
The money was meant to purchase, maintain and renovate more than 600 properties, most of them in the northern Ontario region, but recent court documents suggest the companies' spending habits contributed to their financial crisis.
The entrepreneurs in question are former YTV child actor Robby Clark, Burlington business owners Aruba Butt and Ryan Molony and Hamilton real estate agent Dylan Suitor.
They filed for creditor protection in January, blaming higher interest rates, but court-appointed monitor RSV Restructuring said that’s not the full story, reporting last week that the business partners were spending their millions in ways not intended by their lenders.
Allegations against insolvent group of real estate companies include 'diverted, misused or misappropriated funds.' (RSV Restructuring insolvency report)
Out of the $144 million owed -- with more than $1.7M of which to northern municipalities -- the report cited millions of dollars in "questionable transfers" both between the applicant companies and others and hefty dividend payments to themselves, all without clear explanations.
The report also cites more than $1 million spent on jewelry, lavish travel with private jets, luxury hotels and villas, private chefs, nightclub outings and payments to social media personalities.
Court-appointed insolvency monitor claims real estate group misused $1 million for lavish expenses. (RSV Restructuring insolvency report)
Much of this appears to have taken place while the companies were in their deepest states of financial trouble, all the while posting swanky scenes to social media.
The report characterized the behaviour as evidence of either "an extreme lack" of business knowledge or "diverted, misused or misappropriated funds […] improperly used for personal benefits or extravagant expenses […] without any discernable benefit to the business."
It also said investors were unaware the whole time.
The business partners' public relations team sent CTV News a statement disputing the report’s findings, adding that key evidence was omitted which contradicts it.
"The vast majority of the transactions cited as 'payments' to the principals are, in fact, reimbursements for standard business expenses," the statement reads.
"Allegations of excessive luxury expenditures are inaccurate. These expenses were related to company retreats and capital-raising activities. The principals are committed to defending their lawful and appropriate business practices."
Statement to CTV News on behalf of the insolvent companies about the court-appointed monitor's allegations. (Source: Spokesperson Steven D'amico)
Under their creditor protection, the companies will undergo restructuring, including gradually selling their properties to pay back lenders.
Any lawsuits against them are on hold until the process is complete.
CTVNews.ca Top Stories
Killer who stabbed victim 'at least 52 times' dies in B.C. prison
A 72-year-old inmate serving a life sentence for a brutal murder that happened in Chilliwack in 2016 has died, according to the Correctional Service of Canada.
Israeli airstrikes hit the southern suburbs of Beirut after another strike destroyed buildings
The Israeli military said it struck Hezbollah's headquarters in Beirut on Friday in a series of massive explosions that targeted the leader of the militant group and levelled multiple high-rise apartment buildings.
American woman gets SUV stuck in elevator bay at B.C. casino
A U.S. driver somehow squeezed her vehicle through a parkade hallway at a Metro Vancouver casino Thursday, before getting stuck at an elevator bank.
Hurricane Helene kills at least 44 and cuts a swath of destruction across the Southeast
Hurricane Helene left an enormous path of destruction across Florida and the southeastern U.S. on Friday, killing at least 44 people, snapping towering oaks like twigs and tearing apart homes as rescue crews launched desperate missions to save people from floodwaters.
After decades-long search, northern Ontario man finds vintage vehicle in Larder Lake
A tale about a taxicab hauling gold and sinking through the ice on Larder Lake, Ont., in December 1937 has captivated a man from that town for decades.
2 people caught illegally crossing the International Railroad Bridge into the U.S.: border officials
Two Italian citizens have been apprehended after allegedly illegally crossing over the International Railroad Bridge to the United States.
Former military reservist sentenced for shotgun video calling Liberal MP a 'communist agent' for China
A former Canadian military reservist has been sentenced to house arrest after posting a video of himself firing a shotgun at a picture of a member of Parliament whom he accused of being a 'communist agent' for China.
P.E.I. shellfish festival gastrointestinal illness outbreak largest in province's history: health officer
More than 550 symptomatic people responded to an online questionnaire about a gastrointestinal illness at a Prince Edward Island shellfish festival last weekend.
Family of man who died in incident involving Calgary police issues statement
The family of Jon Wells, a man who died in an incident involving Calgary police earlier this month, say they are seeking time to grieve their loss.