CORPORATIONS - Receivers and receiver managers - Powers of the court

Law360 Canada (September 22, 2022, 6:28 AM EDT) -- Appeal by the appellants from a motion judge’s order approving the agreement of purchase and sale with Sheiner and DiCapo for the whole of Lash Point. Lash Point was a cottage property consisting of approximately 28 acres on Lake Rosseau in the Township of Muskoka Lakes. It had been in the Lash family for over 100 years. In 1996, 13 family members transferred their ownership interests in Lash Point to a non-profit corporation, Lash Point Association Corporation (LPAC). By 2016, LPAC had 25 family members from five groups. The family members disagreed on the future of Lash Point. Some wanted to stay and continue to enjoy the property (the Remainers) while others wanted to leave and realize on the fair market value of their interests (the Departers). Neither side could muster a two-thirds majority of voting members as required by LPAC’s bylaws and the parties concluded that a court-supervised solution was required. In September 2016, Penny J. ordered a staged buyout. The order contemplated various severances. The main family compound would be severed from the remaining property and would be retained by the Remainers (through LPAC). The remaining property would then be severed into various parcels which would be marketed and sold to generate the cash to fund the buyout of the Departers. The process for approval and revision of the severances proved to be complex and time-consuming. In October 2020, Sheiner and DiCapo made a joint offer to purchase Lash Point. Sheiner and DiCapo finalized the agreement of purchase and sale with the Receiver, who then brought a motion for directions from the Court. In June 2021, the motion judge approved the agreement of purchase and sale for the whole of Lash Point. As such, the underpinning of the Penny J. order that provided some protection to those who wished to retain their interest in the cottage property effectively disappeared. The appellants took the position that the motion judge lacked jurisdiction to vary the buyout order and should not have approved the sale to Sheiner and DiCapo....
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