Tarn Financial Corporation

Creditor and stakeholder information

On August 11, 2017, an application was filed before the Commercial List of the Ontario Superior Court of Justice (the “Court”) in respect of Tarn Financial Corporation (“Tarn Financial”) pursuant to sections 207 and 248 of the Business Corporations Act, R.S.O. 1990, c. B.16. (“BCA”).

On September 15, 2017, the Court rendered a decision in favour of a winding-up of the assets of Tarn Financial and indicated that the terms of the court order (the “Winding-up Order”) could be settled at a later court date. The Court issued the Winding-up Order on September 22, 2017 and appointed KPMG Inc. ("KPMG") as liquidator (the “Liquidator”) of the effects and estate of Tarn Financial with powers and obligations set forth in Part XVI of the OBCA and the Winding-up Order. The Winding-up Order is effective on September 25, 2017.

Email: tarn@kpmg.ca
Phone line: 416 649 7623 or 1 855 222 8083

Update on the Status of the Winding Up Proceedings - Last Updated June 18, 2018

On October 12, 2017, the Respondents, Ali Akman, SAMM Capital Holdings Inc (the “Appellants”),. filed a Notice of Appeal to the Divisional Court appealing the Winding Up Order. On October 27, 2017, the Appellants sought and obtained an order expediting the appeal such that it would be heard on December 22, 2017. However, as a result of a potential settlement between the Applicants and the Respondents, the appeal did not proceed on December 22, 2017. The settlement did not proceed. On January 16, 2018, the parties will attend the Divisional Court to seek to reschedule the expedited hearing of the appeal.

On January 16, 2018, the Appellants sought and obtained an order expediting the appeal of the Winding Up Order. The appeal was heard on January 30, 2018 by the Divisional Court, and on February 6, 2018 the Divisional Court dismissed the appeal.

On November 29, 2017, the Court granted a Sale Process Order (the “Sale Process Order”) authorizing the Liquidator to, among other things, retain Colliers Macaulay Nicolls Inc. (“Colliers”) as its marketing and listing agent and conduct a sale process (the “Sale Process”) as set out in Schedule “A” to the Sale Process Order. The Liquidator and Colliers commenced the Sale Process on January 3, 2018. As set out in the call for offers dated February 8, 2018, pursuant to paragraph 4 of the Sale Process, Colliers and the Liquidator have extended the key milestone dates for the Sale Process. The revised timetable for the Sale Process is as follows:

(a) Phase I bids are to be submitted by no later than February 28, 2018;

(b) Phase II bids are to be submitted by no later than March 22, 2018; and

(c) A sale hearing is anticipated to take place at the Superior Court of Justice (Commercial List) on or about April 23, 2018

To participate in Phase I of the Sale Process, each Interested Party must provide Colliers with the following: (i) an executed Confidentiality Agreement; and (ii) an executed Acknowledgement of Sale Process, prior to receiving with the Confidential Information Memorandum or any other confidential information. Interested Parties are strongly encouraged to review the Sale Process Order and the Sale Process attached thereto as Schedule “A”.

Update: March 28, 2018

As indicated above, the Phase II bid deadline of the Sale Process was on March 22, 2018. In accordance with the Sale Process, Colliers and the Liquidator are in the process of reviewing the bids that were received and clarifying the bids to determine the next step in the process. The Liquidator will provide a further update to the website on April 18, 2018. We appreciate stakeholders' patience as the Sale Process continues.

Update: April 17, 2018

The Liquidator and Colliers have completed their review of the Phase II bids that were received, including seeking clarification from parties in respect of their bids, and have selected a Successful Bid and Back-up Bid pursuant to the Sale Process. The Liquidator intends to seek Court approval of the Successful Bid on May 1, 2018.

On April 13, 2018, the Liquidator obtained a Claims Procedure Order calling for Claims against Tarn Financial Corporation by June 15, 2018. Details of the Claims Process and the forms for the Claims Process are available below under the heading ‘Tarn Financial Corporation - Claims Process’.

On April 13, 2018, the Liquidator also obtained a Deposit Confirmation Procedure Order authorizing the commencement of a process to confirm the amount of Deposits held on behalf of Purchasers of condominium units of the development project known as ‘The Kennedy’s’. If a Purchaser disputes the information contained on the Deposit Statement it receives from KPMG, they are required to do so by May 15, 2018. Details of the Deposit Confirmation Procedure and the forms for the Deposit Confirmation Procedure are available below under the heading ‘Tarn Construction Corporation - Deposit Confirmation Procedure’.

Update: May 1, 2018

The Liquidator’s and Receiver’s motion was heard by the Court on May 1, 2018. The judge reserved his decision on the matter and will likely render his decision within five to ten days. KPMG will update the website once a decision is rendered.

On May 9, 2018, the Court granted the three Orders being sought by the Liquidator and Receiver at the May 1, 2018 motion and issued reasons for granting the Orders. The three Orders and Endorsement of Justice McEwen dated May 9, 2018 are posted in the Court Orders section below. The Orders granted on May 9, 2018, among other things, (a) approve the Successful Bid for the sale of the assets of Tarn Financial; (b) establish a process to resolve any disputes relating to deposits held by the Deposit Trustee, Bennett Jones LLP; and (c) confirm that the Receiver is entitled to terminate the Agreements of Purchase and Sale (“APSs”) relating to the proposed condominium units in The Kennedys on behalf of Tarn Construction without damages, subject to further Order of the Court being granted to address the return of Deposits to the Purchasers prior to doing so. The Court also confirmed that Purchasers are unable to pursue any other claims or costs upon termination of their APSs other than a return of their Deposits.

Update: June 18, 2018

On June 14, 2018, the Court granted a Deposit Return Procedure Order to address the termination of Purchasers’ APSs and set out the procedure to be followed for the return of Proven Deposits to Purchasers of proposed condominium units in The Kennedys. In order to facilitate the return of Proven Deposits, the Receiver will be setting up a Proven Deposits return desk in the former condominium sales office located at the Delta Toronto East Hotel at 2035 Kennedy Road between the hours of 8:30 a.m. and 8:30 p.m. on Wednesday July 11, 2018 and on Saturday July 14, 2018. If Purchasers cannot attend in person on one of the dates above, there is a procedure in place to allow Purchasers’ Proven Deposits to be mailed to them upon the Receiver receiving certain information. Please see the section “Tarn Construction Corporation - Deposit Return Procedure” below for the Deposit Return Procedure Order, Frequently Asked Questions and the forms that are required to be completed and delivered to the Receiver in order for Purchasers to receive their Proven Deposits.

Tarn Construction Corporation – Deposit Return Procedure

The Court granted the Deposit Return Procedure Order on June 14, 2018 to address the return of Deposits to Purchasers and the termination of Purchasers’ APSs.

In order for a Purchaser to receive a cheque in the amount of their Proven Deposits, they must execute a Release Agreement and fill out and execute a Certificate of Identity attaching copies of two pieces of current (and not expired) government issued identification (one of which shall include a photo of the Purchaser and one which shall include the Purchaser’s address as more particularly set out in the Certificate of Identity) and deliver these documents to the Receiver for review. Once the Receiver has reviewed the documentation and confirmed that the Release Agreement and Certificate of Identity have been properly filled out and executed, the Receiver will deliver a cheque to the Purchaser in the amount of their Proven Deposits.

Purchasers have two options to obtain their Proven Deposits:

Attend, at their own expense, at the former condominium sales office located at the Delta Toronto East Hotel at 2035 Kennedy Road between the hours of 8:30 a.m. and 8:30 p.m. on Wednesday July 11, 2018 or Saturday July 14, 2018.
If they cannot attend in person, they may deliver their executed Release Agreement and Certificate of Identity attaching copies of two pieces of government issued identification to the Receiver by sending it by regular mail, courier, email or facsimile to the Receiver.

Please refer to Schedule D, Schedule E and Schedule F of the Deposit Return Procedure Order and the ‘Frequently Asked Questions’ and ‘Deposit Return Checklist’, attached below, for information and instructions with respect to the Deposit Return Procedure.

Attachments:

Deposit Return Procedure Order dated June 14, 2018 [PDF 1.5 MB]
Schedule D: Fifth Communications to Purchasers dated June 19, 2018 [PDF 45 KB]
Blank Schedule E: Release Agreement [PDF 28 KB]
Blank Schedule F: Certificate of Identify [PDF 24 KB]
Frequently Asked Questions – Deposit Confirmation Procedure Order [PDF 135 KB]
Deposit Return Checklist [PDF 84 KB]

Tarn Financial Corporation - Claims Process

Pursuant to an Order of the Court dated April 13, 2018 (the “Claims Procedure Order”), a claims process has been commenced calling for claims that any claimant may have against Tarn Financial Corporation up to September 25, 2017 (the “Claims Process”). Tarn Financial Corporation operates the Delta Toronto East Hotel located at 2035 Kennedy Road, Toronto ON, M1T 3G2.

Please refer to ‘Schedule A - Claims Process Notice’ of the Claims Procedure Order, attached below, for important dates, information and instructions with respect to the Claims Process.

The Claims Procedure Order and Proof of Claim package are also attached below:

Claims Procedure Order dated April 13, 2018 [PDF 3.2 MB]
Schedule A: Notice of Claims Process [PDF 16 KB]
Schedule B: Proof of Claim package [PDF 20 KB]
Schedule D: Notice of Objection [PDF 17 KB]
Frequently Asked Questions - Claims Procedure Order April 17, 2018 [PDF 85 KB]
Frequently Asked Questions - Notice of Determination - Condominium Brokers [PDF 90 KB]

Tarn Construction Corporation - Deposit Confirmation Procedure

On April 13, 2018, the Court granted an Order (the “Deposit Confirmation Procedure Order”) authorizing KPMG to commence a process to confirm the amount of Deposits made by each Purchaser of a condominium unit at the development project known as ‘The Kennedy’s’ pursuant to the terms of their Agreement of Purchase and Sale (the “Deposit Confirmation Procedure”). Each Purchaser will receive a Deposit Statement from KPMG in the mail. If the information on the Deposit Statement is correct, the Purchaser does not need to take any further steps. If the Purchaser disagrees with the Deposit Statement, then the Purchaser must file a Notice of Dispute of Deposit Statement with KPMG by May 15, 2018.

Please refer to ‘Schedule A – Deposit Statement’ of the Deposit Confirmation Procedure Order, attached below, for important dates, information and instructions with respect to the Deposit Confirmation Procedure.

In order for KPMG to undertake the Deposit Confirmation Procedure, on April 13, 2018, the Court granted a Receivership Order pursuant to section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended (the “CJA”) appointing KPMG as receiver and manager (in such capacities, the “Receiver”) without security, of all of the assets, undertakings and properties of Tarn Construction Corporation (“Tarn Construction”) acquired for, or used in relation to a business carried on by Tarn Construction.

As set out above, Purchasers of a unit in ‘The Kennedy’s’ will receive a statement in the mail from KPMG. If you are a Purchaser of a unit in ‘The Kennedy’s’ and have not received a Deposit Statement by April 30, 2018, please notify KPMG at 1-855-222-8083 or tarn@kpmg.ca.

Deposit Confirmation Procedure Order dated April 13, 2018 [PDF 3.5 MB]
Blank version of Schedule A – Deposit Statement – form of schedule to be received in the mail [PDF 56 KB]
Schedule C: Notice of Dispute of Deposit Statement [PDF 5.5 MB]
Schedule D: Notice of Dispute of Amended and Restated Deposit Statement [PDF 22 KB]
Frequently Asked Questions - Deposit Confirmation Procedure Order (April 17, 2018) [PDF 138 KB]

Court Orders

The Winding-up Order dated September 15, 2017 [PDF 5.5 MB]

Decision of Justice Lederman dated September 15, 2017 [PDF 306 KB]

Order for Ancillary Relief dated November 24, 2017 [PDF 691 KB]

Endorsement of Justice McEwen dated November 24, 2017 [PDF 720 KB]

Order approving the Sale Process dated November 29, 2017 [PDF 3.4 MB]

Endorsement of Justice McEwen dated November 29, 2017 [PDF 123 KB]

Order approving the OMB Appeal dated December 6, 2017 [PDF 409 KB]

Endorsement of Justice McEwen dated December 6, 2017 [PDF 155 KB]

Decision of the Divisional Court dated February 6, 2018 [PDF 271 KB]

Claims Procedure Order dated April 13, 2018 [PDF 3.2 MB]