Vancouver developer seeking creditor protection, facing $700 million in debt
Coromandel Properties Ltd. has submitted a petition to the Supreme Court of B.C. for relief under the Companies' Creditors Arrangement Act.
Court documents show Coromandel owns 16 Vancouver real estate projects in various states of development, worth around $1 billion in total.
However, the company owes its lenders upwards of $700 million.
"If the court grants their request for protection, Coromandel will work towards restructuring its finances and advance its operations," said the company in an emailed statement.
Court files show the company started operating in Vancouver in 2013.
Vancouver realtor Steven Saretsky says he's watched the company through the years take a high-risk, high-reward approach to development.
"It works great in a rising market and when interest rates are falling, and obviously we're in the opposite now," Saretsky told CTV News.
"Prices are dropping, interest rates are up and so, you know, when the tide goes out, you see who's swimming naked."
Ron Rapp, CEO of Homebuilders Association Vancouver, says it's too early to tell if Coromandel's court filing is a sign of things to come for the industry.
"Overall, we're not hearing any rumour that this is a systemic or endemic problem," said Rapp. "We may see other instances of this nature, but this one is particularly significant given the number of properties involved."
However, Rapp does say the cooling of the market has forced developers to adjust their strategy moving forward.
"I know that in the industry as a whole, most builders and developers are repositioning or re-evaluating their circumstances in the moment; taking cash flow into account," he said.
Saretsky believes the news on Coromandel could shake up the industry.
"I think that other lenders are going to see this as a reminder, and especially in this environment, to maybe be a little more conservative," he said.
Rapp says tight regulations on purchasing real estate mean any pre-sale buyers who placed a deposit should be protected if the company were to go bankrupt.
"Their investments and deposits should be secured because they are held in trusts and should the deal collapse or project collapse, they will probably get their money back, but I don't know if there's any extenuating circumstances on that because we're not privy to those contracts," Rapp said.
Coromandel declined to comment on its timeline of projects or any plans to refund deposits.
CTVNews.ca Top Stories
Protesters smash windows at McGill University; police use tear gas to disperse crowd
Montreal police deployed tear gas as they dispersed a crowd of protesters participating in a pro-Palestinian demonstration after members of the group smashed windows at McGill University Friday evening.
Biden rejects independent medical evaluation in ABC interview as he fights to stay in race
U.S. President Joe Biden, fighting to save his endangered reelection effort, used a highly anticipated TV interview Friday to repeatedly reject taking an independent medical evaluation that would show voters he is up for serving another term in office while blaming his disastrous debate performance on a 'bad episode' and saying there were 'no indications of any serious condition.'
Canada beat Venezuela on penalties to reach Copa America semifinals
Canada claimed a 4-3 penalty shootout win over Venezuela on Friday to reach the Copa America semifinals for the first time after an absorbing contest finished 1-1.
Owe money for CERB? Here's how the CRA is getting it back
The Canada Revenue Agency (CRA) may face some hurdles in collecting the money loaned through COVID-19 pandemic relief programs, like the Canada Emergency Response Benefit (CERB), according to a tax lawyer.
Stay away from hogweed: What you need to know about these pesky and dangerous plants
Hogweed is harmful to humans and, experts say, the invasive species has become a growing problem in southern Ontario.
N.B. man denied flight due to tear in passport’s seam
What seemed to be a minor passport issue turned into a major problem for a New Brunswick man who was denied a boarding pass from Air Canada.
Earth's core has slowed so much it's moving backward, scientists confirm. Here's what it could mean
Deep inside Earth is a solid metal ball that rotates independently of our spinning planet, like a top whirling around inside a bigger top, shrouded in mystery.
Summer jobs could prove tough to come by for students, according to latest job stats
Statistics Canada’s latest jobs report shows youth unemployment reached a near decade high.
Ottawa woman, 49, wins $70 million, plans to help community
An Ottawa woman, who has survived cancer and has overcome addiction, has won $70 million with Lotto Max.