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B.C. condo developer Coromandel Properties ends creditor protection claim

The Vancouver-based condo developer had petitioned the court under the Companies' Creditors Arrangement Act.
The Citti project was recently completed by Coromandel Properties Ltd.

Vancouver condo developer Coromandel Properties says it is no longer pursuing creditor protection, after reaching a deal with its numerous lenders.

“Coromandel has discontinued its CCAA (Companies’ Creditors Arrangement Act) proceedings. All lenders who have filed foreclosure petitions have adjourned their hearings,” the company stated following a hearing March 10 at B.C. Supreme Court.

The company had $700 million in debt related to the purchase of 16 groups of properties under varying degrees of construction.

Rapidly rising interest rates compounded by delays in construction approvals were cited by the company as reasons for falling short on its payments to lenders, in a court petition filed Feb. 6.

The company claimed all of its projects were in jeopardy, as eight secured lenders had issued default notices and demanded their loans, totalling close to $300 million, be repaid.

The court had appointed Deloitte as a monitor of the proceedings so as to avoid liquidating assets “on a fire sale basis.”

In some instances, Coromandel has already sold condo units that have not yet been built. The company is also intending to launch new rounds of so-called pre-sale condos this fall. In other instances, the company is acting as a landlord for rental units it is seeking to develop.

Coromandel, whose chief operating officer is former Vancouver city councillor Raymond Louie, creates separate limited partnership companies for each of its projects. Zhen Yu Zhong is listed as the sole director and officer of each of the general partners and registered owners for each of the projects. Partner companies include: CM Bay Holdings Ltd., Coromandel Resorts Ltd., Coromandel Capital Ltd., Coromandel Properties Ltd., Mulberry Capital Ltd., CM Bay Investments Ltd. and Baystone Properties Ltd.

Coromandel, Zhen and Junchao Mo were listed as guarantors of loans creditors are demanding back.

While the loans may have been renegotiated, the company is still facing claims by unpaid contractors, according to court filings. Rely Construction, for example, claimed on March 7 it is owed $650,000 from Coromandel.

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