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The Crown has dropped one of two criminal charges against Michelle Shemilt, a Toronto fashion entrepreneur prosecuted on allegations that she drove away after fatally running over a homeless man.

Ms. Shemilt, 35, was initially charged with causing death by criminal negligence and failing to stop at the scene of an accident that involved death.

At a brief court appearance Thursday morning, Crown Attorney Jennifer Armstrong said the prosecution was withdrawing the count for criminal negligence.

“There is no realistic prospect of conviction,” Ms. Armstrong told the court.

She made the announcement following a judicial pre-trial before Ontario Court Justice Mavin Wong.

The remaining charge against Ms. Shemilt, leaving the scene of a fatal accident, will be dealt with at a 10-day trial starting April 20 next year.

The decision indicates that the Crown is no longer able to prove that Ms. Shemilt showed reckless disregard for the safety of Michael Watts, who died after he was found with severe trauma in a back alley in Toronto’s Cabbagetown neighbourhood.

“The evidence clearly shows that Ms. Shemilt was not criminally negligent and we welcome the Crown Attorney’s decision to withdraw that accusation,” defence lawyer Daniel Brown said in a statement.

The fatal accident took place the afternoon of Sept. 21, 2018, on Nuthatch Lane, south of Carlton Street.

According to a police affidavit, a home security camera recorded a cyclist, then two cars, an Audi and a black Dodge SUV, passing through the lane.

The cyclist, local resident Danna Osbourne, later told investigators that she saw and spoke to a man who was sprawled on the ground and appeared intoxicated.

The driver of the Audi, the novelist Michael Ondaatje, called 911 to report that the man was badly injured.

Ms. Shemilt also called 911 about seeing the man. An ambulance took him to St. Michael’s Hospital, where he died an hour later. He was identified through his fingerprints as Mr. Watts, a 57-year-old with no fixed address.

According to the police affidavit, investigators cleared Mr. Ondaatje since his Audi showed no signs of a collision.

Detectives later obtained a warrant to search Ms. Shemilt’s vehicle, which they said matched the description of the black Dodge SUV. She was arrested on Jan. 3.

A former bank equity trader, Ms. Shemilt founded the NUMI fashion firm, selling her own line of women’s undershirts. She has appeared on CBC’s Dragons’ Den to pitch her project and also wrote an article for The Globe and Mail about crowdfunding for startups.