In one of the larger insolvencies in the GTA in recent years – based on the scale of the project – the Labatt Village project by Toronto-based developer TAS has been placed under receivership, according to filings in Ontario Superior Court.

The subject site is 7 Labatt Ave. and 77 River St. in Toronto, a 1.34-acre property located between Dundas Street East and Queen Street East near the Don River that is currently occupied by two commercial buildings. The Salvation Army previously occupied 77 River before relocating in fall 2020 to 7 Labatt.

In 2014, TAS submitted a rezoning application for a 38-storey tower with 584 residential units, 34,000 sq. ft. of office space, and 17,000 sq. ft of retail space. A site plan approval application was then submitted in 2019, but did not progress.

That year, Tricon Capital Group Inc. announced it had bought into the project, which had a total equity commitment of $60 million, split between Tricon (30 per cent), an unnamed institutional investor (50 per cent), and TAS (20 per cent). In 2021, however, Tricon said in its Q3 report that it and the institutional investor had elected to sell their combined 80 per cent stake to TAS “as a result of a change in the project’s business plan.”

Tricon, which was acquired by Blackstone in 2024, ultimately got $15.1 million for its stake.

Although no application has been submitted, court documents state TAS was planning 1,240 condos across 48- and 44-storey towers that would also house 12,000 sq. ft. of office space and 4,500 sq. ft. of retail space.

The receivership

Operating through Labatt Village LP, Labatt Village GP Inc., and Labatt Village Holdings Inc., TAS entered into a loan agreement with Toronto-based private equity real estate investment firm KingSett Capital in November 2021 for the principal amount of $25.5 million, with interest accruing at RBC Prime Rate + 8.55 per cent per annum.

According to its application, KingSett granted the developer multiple extensions and had also increased the loan amount twice. KingSett issued a formal demand letter on July 17, 2025 but received no repayment, prompting a second demand letter on Jan. 30, 2026.

“Unfortunately, the development of the project has not materially advanced since the initial advance under the loan facility in 2021,” said KingSett. “Due to, among other factors, falling real estate prices and depressed market conditions, the respondents do not have access to adequate liquidity to complete the re-zoning process for the project or to make payments in connection with the Loan Facility.”

KingSett says it is owed $23,446,623.06 as of Jan. 30, 2026, with interest continuing to accrue.

Notably, KingSett is the second-ranking charge holder, with Scotiabank holding a first-ranking mortgage in the principal amount of $75 million. KingSett says representatives of Scotiabank informed it that approximately $60 million was owed as of Jan. 27, 2026. Scotiabank has not taken action pursuant to the loan, but KingSett says Scotiabank is in support of the receivership.

Court documents also indicate the Salvation Army holds an option to purchase the property, but KingSett says it has engaged the Salvation Army and not received a response as of its filing.

KingSett stalking horse bid

The Ontario Superior Court granted KingSett’s receivership application on Feb. 10, with PricewaterhouseCoopers serving as the receiver, and also simultaneously approved the court-ordered sales process. Approval for the latter usually occurs several weeks or months after the receivership order is granted, but the speed in this case likely comes from KingSett opting to act as the stalking horse bidder.

A stalking horse bid serves as a “floor” transaction contingent on no better offers coming forth during the sales process. KingSett says the purchase price is equal to the sum of the amounts owed to Scotiabank and KingSett, plus other charges such as property taxes and fees to the receiver. The amounts are variable, but KingSett says the total will be no less than $84,150,000.

With this stalking horse bid in place, the sales process will run until mid-April and bids will only qualify if they are superior to that of KingSett. The bid by KingSett has an outside completion date of 45 days following court approval and qualified bids would need to at least match that timeline.

For KingSett Capital, this is the latest in a series of mortgage investments that have ended up in the borrower becoming insolvent. Those examples include multiple loans granted to Stateview Homes, Vandyk Group, and Moldenhauer Corporation in Ontario as well as Thind Properties in British Columbia. At one point, KingSett had over $1 billion tied up in receivership proceedings according to a report in Storeys, and many of those cases remain unresolved, with KingSett providing additional capital to complete projects under receivership in several cases.

TAS

For TAS, which was founded by Babak and Tooran Mortazavi and is now led by their son Mazyar Mortazavi, this is the second project to be placed under receivership within a year.

Last March, a 13-storey project TAS was planning at 3775-4005 Dundas St. W. in Toronto was placed under receivership by Cameron Stephens Mortgage Capital Ltd., which was owed approximately $17.5 million. The development site was listed last summer by Colliers and remains unsold.

Over the summer, TAS sold a block of commercial properties located at 453-491 Eglinton Ave. W. in Toronto to Skye Capital Partners Ltd. for a combined $20.85 million. The block included the former head office of TAS. The company’s head office is now located within 66 Wellington St. W., according to its website.

A few months later, in October, TAS then listed its largest development site: 25-33 Hillcrest Ave. and 3154-3168 Hurontario St., a 5.3-acre site next to the Cooksville GO Station in Mississauga where TAS was planning 2,341 residential units across five high-rise towers between 35 and 42 storeys. JLL has the listing and the site remains unsold.

TAS also owns a number of other development sites and commercial properties which do not appear to be facing insolvency.