Skip to main content

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. Top Stories

Here are the signs you're ready to downsize your home

Amid the cost-of-living crisis, many Canadians are looking to find ways to save money, such as downsizing their home. But one Ottawa broker says there are several signs to consider before making the big decision.

Stay Connected