An Ontario Superior Court justice has ordered an independent accounting firm run the business after a report alleged four landlords spent millions of dollars of investors' money on a lavish lifestyle.
Lawyers for KSV and hundreds of investors, who are owed around $144 million, said at a hearing last week they'd only support an extension of bankruptcy protection if KSV was allowed to take control.Private jets, yachts and parties: Ontario landlords flaunted lavish lifestyle as business began to crumble
"The manner in which the applicants have been portrayed is exceptionally unfair and it ignores all the good they have done," said Blinick.KSV is now in charge of managing the business, including overseeing all lease agreements, renovations and property sales. The money was supposed to be used to buy Ontario properties to fix up and then rent out or sell at a higher price.
KSV said, in a motion filed with the court in June, their findings are despite not being provided with some documents from the landlords. These documents include:Explanations for why money was transferred to Butt's cleaning business and Clark's lawn care business — neither of which investors had agreed to invest in.
However, Butt's corporation did take out a second mortgage on one of the properties. Pino said she wasn't informed until it came to light in the bankruptcy proceedings.