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A Meridian employee works at the credit union’s office in Toronto’s financial district.The Globe and Mail

A fourth lender has demanded repayment of millions in loans from troubled Toronto-area land developer StateView Homes.

On May 5, Meridian Credit Union Ltd. filed an application to appoint a receiver for StateView Homes (Elm&Co) Inc., which was planning to build 206 townhouses on raw land at 12942 York Durham Line in Stouffville, Ont., near a GO Transit station. Meridian is seeking repayment of $17.8-million it loaned StateView on Dec. 5, 2022. In its filing, it warns the court that three other lenders subsequently loaned the Elm site another $27-million, but that a $20.8-million charge registered by Bergo Investment Inc., MCO Management Inc. and Tony Karamitsos on Dec. 16, 2022 was unauthorized.

On May 2, lenders Kingsett Mortgage Corp., Dorr Capital Corp., and Atrium Mortgage Investment Corp., succeeded in getting a court-appointed receiver to sort out six StateView projects with more than 700 unbuilt townhomes. Together with Meridian’s demands and the Bergo/MCO loans StateView owes its lenders at least $260-million.

StateView is also operating under an aggressive repayment settlement as a result of a $37-million cheque-kiting fraud the company has blamed on a “rogue” former chief financial officer.

According to settlement agreement endorsed by Ontario Superior Court Justice Koehnen on April 4, StateView agreed to pay $3.15-million upon signing a settlement over the fraud, a second payment of $6.15-million by April 17, and another $6.15-million by May 1. Three more payments of the same amount are due on May 31, June 15, June 30 with any outstanding balance owed by July 14.

The settlement warns that if StateView misses any payments TD will immediately move to insolvency on StateView assets (a process already underway on at least some of the properties TD’s registered second or third mortgages against) “without any grace period for payment.”

StateView’s lenders have asserted in various court filings that StateView has in recent months missed interest payments, tax payments and municipal fee deadlines and appears to have a cash crisis and no liquidity.

In the past two weeks, StateView has listed four of 11 commercial condominium units – for prices between $1.7-million and $2.2-million – it purchased in recent years at 410 Chrislea Rd. in Woodbridge, Ont.

Realtor Luca Carbone with Royal LePage Real Estate Professionals is acting as the listing agent for StateView’s commercial units and has also listed for assignment sale three unfinished townhouses StateView is building at On the Mark (34 Markland St., listed for $1.49-million) and High Crown Estates (units 38 and 48 at 13151 Keele St. for $1.49-million and $1.999-million).

Typically, developers hold tight control of preconstruction assignment sales, and sellers must obtain their approval for any assignment of a contract. In the case of the StateView units it is unclear who would grant that permission now that both projects are under the control of court-appointed receiver KSV Restructuring Inc., who are granted wide authority to manage the company’s business affairs until lenders are repaid. Requests for comment to KSV went unanswered.

Not included in the TD settlement is Daniel Ciccone, the former CFO of StateView. Mr. Ciccone has filed a notice to defend himself against the civil suit brought by TD.

Mr. Ciccone also listed one of his properties for sale in recent weeks: his new-build home (with salt-water pool and luxury kitchen) in Richmond Hill, Ont., is on sale for $4,288,000. According to property records, Mr. Ciccone bought a second luxury home in King City, Ont., for $5-million on Feb. 9, 2023, just weeks before TD froze StateView’s business accounts for the alleged fraud. Built in 2002 on a 2.5-acre site, the house was previously sold for $3.8-million in 2019.

Property records show StateView’s financial situation was precarious long before the cheque-kiting scheme came to light. In the case of BEA Towns in Barrie, Ont., property records show StateView paid $25.6-million in April, 2022 for the land and registered a $37.5-million loan on the property from Dorr Capital at the same time. On Dec. 16, 2022, StateView registered a loan of $20.8-million from Bergo, MCO and Mr. Karamitsos – the same day it registered a $20-million loan on the Elm&Co land in Stouffville. Neither Bergo or MCO responded to requests for comment. Only initial excavation work appears to have been started at the BEA Towns site.

On May 5, KSV sent a notice to hopeful buyers who hold agreement of purchase and sale contracts (APS) with StateView warning them that their deposits were gone.

“The receiver has been advised … that none of the deposits remain in any of the companies’ bank accounts and all deposits were spent on direct and indirect project costs prior to the commencement of the receivership proceedings,” the notice reads. “The receiver has not independently determined, at this time, the use of the deposits.”

KSV outlined for buyers that any deposits they are able to recover will come from home warranty provider Tarion, which provides up to $40,000 in insurance for APS agreements signed before 2018, and up to 10 per cent of a home’s purchase price (up to a maximum $100,000) for home’s worth more than $600,000 for contracts signed after 2018. Court filings suggest there are dozens, if not hundreds, of buyers who have already paid more than $100,000 in deposits to StateView companies.

“I couldn’t sleep for two nights. … I literally feel like crying,” said one buyer in BEA who spoke to The Globe. The Globe is not sharing the buyer’s name because she has not yet informed her husband that for the second time in recent years a preconstruction condo the couple invested in has fallen into receivership. “It is very stressful, another builder did the same and held our money for four years,” she said. “They [builders] get rich and they don’t care about people like me who give them $80,000. I had to cut my daughter’s gymnastic class to afford it. It’s been hard. Who is going to compensate us for that?”