Vancouver developer Coromandel Properties stops CCAA proceedings after reaching agreements with lenders

Mar 10 2023, 7:45 pm

Financially troubled Vancouver developer Coromandel Properties is no longer seeking protection under the Companies’ Creditors Arrangement Act (CCAA) after reaching agreements with its lenders.

The company filed for insolvency last month, bringing the future of its partially completed Vancouver housing projects into question. Coromandel has 16 active real estate projects within Vancouver, many in the Cambie Street Corridor near Oakridge.

In the BC Supreme Court Friday, counsel for Coromandel said the company has now had time to discuss its projects with stakeholders and has reached agreements with lenders to the extent that it’s discontinuing CCAA proceedings.

All petitions have been adjourned except for two outstanding foreclosures, which will be dealt with in court later this month. The two items are between Accountable Mortgage Investment Corp. and Coromandel’s Wilmar Project and Nanaimo 22 development.

bc court

Provincial Court of British Columbia. (Daily Hive)

One of the affected parties was Rely Construction Ltd. a Vancouver-based company whose owner Cong (Ivan) Gu said he was owed nearly $1.2 million by Coromandel for work on the Wilmar Project on Southwest Marine Drive. Gu said Coromandel stopped paying his invoices from May 2022 onward. Coromandel has now partially paid Rely company $300,000.

Coromandel owed a total of about $700 million on its portfolio of projects — which could generate a total of 2,000 housing units.

It went to the Supreme Court to file for insolvency and seek protection under the CCAA — a remedial law that allows companies owing in excess of $5 million the chance to continue doing business while it seeks compromise with its creditors. The CCAA’s purpose is to avoid, where possible, the “social and economic consequences of bankruptcy” should a company close, according to the Government of Canada’s website.

According to realtor Sam Nakhleh, senior vice-president at NAI Commercial who filed an affidavit in the court case, only six of Coromandel’s 16 projects were part of its CCAA application. They were:

  • Georgia Court: a  25-strata residential building in Chinatown
  • Pacific Burrard: an office building
  • Nanaimo 22: a speculative land assembly of 11 parcels zoned for single-family homes
  • Slocan 29: another collection of parcels
  • Alberta 40: a third collection of parcels
  • Wilmar Project: six parcels of land containing partially-built infill homes and a heritage home and coach house undergoing upgrades

Coromandel’s leaders include Zhong Zhen Yu, who is the director, and former Vancouver city councillor Raymond Louie, who is the chief operating officer.

In the company’s initial petition, Coromandel blamed the slow application process within the City of Vancouver and rising interest rates for exacerbating its cashflow problems. Initially, it said that not receiving CCAA protection could result in a fire-sale of its properties. Now, that doesn’t appear to be the case.

The ramifications of its insolvency were felt beyond just the housing projects — it even put the beloved Cherry Blossom Festival at risk when it pulled out as title sponsor over its financial difficulties.

With files from Daily Hive Urbanized’s Kenneth Chan 

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