An Ontario court granted approval for the receiver of real estate venture Cacoeli Asset Management Inc. to begin the process of selling off the firm’s assets, despite ongoing legal challenges.
Earlier this year, at the request of the Ontario Securities Commission (OSC), the Ontario Superior Court of Justice appointed Grant Thornton Ltd. as the receiver of Cacoeli and related companies — while the regulator investigated the firm amid concerns that it may have breached securities rules.
The OSC hasn’t made any allegations against the firm, which actively opposed the receivership — and, according to the court’s latest decision, it is seeking leave to appeal the receivership order to the Supreme Court of Canada.
In the meantime, the receiver asked the Ontario court to approve its proposed process for selling certain properties that it has taken control of as part of the receivership.
According to the court’s ruling, Cacoeli requested an adjournment of the receiver’s motion — arguing that it’s premature to go ahead with selling its assets when it hasn’t been accused of any wrongdoing by the OSC.
“They contend that the receiver was appointed with a protective mandate so the Ontario Securities Commission could continue its investigation into alleged securities law violations … The respondents rely on the fact that the commission has not yet commenced an enforcement proceeding,” it said. The ruling added Cacoeli is arguing that the receiver is “proceeding as if the matter has been finally determined and that the receiver is acting inappropriately by seeking to liquidate the respondents’ business.”
However, the court sided with the receiver, noting that the receivership order authorizes it to solicit offers for the firm’s assets, and to sell those assets, with the court’s approval required for any specific transaction.
It also noted that courts typically “give significant weight to the recommendation of its receiver, who is a court-appointed officer with significant expertise in insolvency proceedings. A court will assume that the receiver is acting properly unless the contrary is clearly shown.”
In this case, it declined to adjourn the motion, and it approved the proposed sales process — which, the court said, will “canvass the market broadly to allow the maximum number of interested purchasers to undertake due diligence and submit competitive offers and, ultimately, obtain the highest and best price.”