The company behind the troubled former Olympic Village development has been placed in receivership by the City of Vancouver.

Ernst & Young has been appointed as the receiver for Millennium Southeast False Creek Properties, and will now take control of the development, the City of Vancouver announced Wednesday.

Last month, the city announced that Millennium had come up $8-million short on a $200-million loan payment due at the end of August.

Another $75-million payment is due in January.

Mayor Gregor Robertson told reporters that while Ernst & Young will do whatever it can to make sure the loan is fully repaid, there are no guarantees.

"It'll be very difficult to recoup all of the investment for taxpayers on this. That'll only happen if the market is very strong in the months and years ahead," he said.

Heather Ferris, a lawyer specializing in banking and insolvency with the Vancouver firm Lawson Lundell, told that receivership is the "last step" for a lender impatient to get its money back.

"It is the standard remedy available to a lender when a loan goes into default," Ferris said. "There's a dispute or a disagreement between the borrower and the lender about how the loan is going to be paid back."

She explained that Ernst & Young will now seize control of Millennium's board of directors.

"You take the borrower out of the picture," Ferris said.

The receiver's job now is to do whatever it can to make sure the city gets its money back. For complete details of the receivership deal, read the receivership order.

"Receivers have an expertise with respect to liquidating assets to get their money back -- that's their job," she said.

The upscale Olympic Village development has struggled to find buyers since the Games ended, despite 223 presales in 2008.

Only 36 more have sold since the units hit the market in May, leaving 454 units unsold – more than half of which are currently priced at more than $1-million.

Ferris said that it's hard to predict if prices at the development will begin falling now that the company is in receivership

"I know that the public perception is that a project in receivership is going to come down in price, but it often happens that it goes the other way," she said.

She added that the receiver could also choose to have an auction to sell off the condo units.

"It completely depends. We don't know anything about what the receiver's marketing strategy is going to be."