motion record (returnable november 14,...

Court File No. CV-17-11726-OOCL

ONTARIOSUPERIOR COURT OF JUSTICE

COMMERCIAL LIST

BETWEEN:

HARBOUREDGE MORTGAGE INVESTMENT CORPORATION

Applicant

-and-

2177427 ONTARIO LIMITED

Respondent

MOTION RECORD(Returnable November 14, 2017)

November 2, 2017 FOGLER, RUBINOFF LLP77 King Street West, Suite 3000PO Box 95TD Centre North TowerToronto, ON MSK 1 G8

Vern W. Dane (LSUC# 32591E)Tel: 416.941.8842Fax: 416.941.8852Email: vdare(cr~,foglers.com

Lawyers for The Fuller Landau Group Inc., in itscapacity as court appointed receiver of theproperly of the Respondent

TO: SERVICE LIST

SERVICE LIST

BALDWIN LAW GRUDEFF, BERGBarristers and Solicitors Barristers and Solicitors54 Victoria Avenue 3300 Steeles Ave. WestBelleville, Ontario K8N 1Z7 5th Floor

Vaughan, Ontario L4K 2Y4

IAN BRADY/GREGORY R.M. PARKERTel.: 613-771-9991 SHELDON J. BERGFax: 613-771-9998 Tel: 905.761-9445Email: [email protected] Fax: 905.761-8500

[email protected] Email: [email protected]

Lawyers for 2177427 Ontario Limited Lawyers for Giuseppe Mozzone

JUSTICE CANADA MINISTRY OF FINANCETax Section Legai Services Branch130 King Street West 33 King Street WestSuite 3400, Exchange Tower 6th FioorToronto, Ontario M5X 1 K6 Oshawa, Ontario L1 H 8H5

DIANE H. A. WINTERS KEVIN O'HARATel: 416.973.3172 Email: [email protected]: 416.973.0810Email: [email protected]

NATIONAL LEASING GROUP INC. HEWLETT-PACKARD FINANCIAL1525 Buffalo Place SERVICES COMPANYWinnipeg, Manitoba R3T 1 L9 200 Connell Drive

Berkeley Heights, New JerseyU.S.A. 07922

ANNA NEUSTAEDTEREmail: [email protected]

LISA A. KELDEREmail: lisa. [email protected]

CHRISTOPHER A. MOORS VICTOR L. VANDERGUST PROFESSIONAL CORP.Barrister and Solicitor Barrister and Solicitor63 Robert Street 11 Hurontario StreetOttawa, Ontario K2P 1G5 Collingwood, Ontario L9Y 3Z4

Tel: 613.230-9448 VICTOR L. VANDERGUSTFax: 613.230-3624 Tel: 705-445-4544Email: [email protected] Fax: 705-445-4160

Email: [email protected]

Lawyer for HTG Management Group Inc.

Lawyers for HarbourEdge MortgageInvestment Corporation

O'FLYNN WEESE LLP GARFIN ZEIDENBERG LLP65 Bridge Street East 5255 Yonge StreetBelleville, Ontario K8N 1 L8 Suite 800

Toronto, Ontario M2N 6P4WILLIAM C. KINGTel.: 613-966-5222 x 232

DAVID DOWNSFax: 613-966-8036 Tel.: 416-642-5406Email: [email protected] Fax: 416-512-9992

Email: [email protected]

Lawyers for PurchaserLawyers for Wildwood Capital Inc.

ROMSPEN INVESTMENT CORPORATION ELIE KHOURI162 Cumberland Street 30 Lillico DriveSuite 300 Ottawa, Ontario K1V 9L6Toronto, Ontario M5R 3N5

Email: [email protected] ROITMANEmail: [email protected]

J.D.F.R. INVESTMENTS INC. SPARK LLP139 Bayswater Ave. Barristers and SolicitorsSuite 4 169 King Street EastOttawa, Ontario K1Y 2G2 3~d Floor

Toronto, Ontario M5A 1J4

JEFF ROSEKATTeL 416 639-2151Fax: 647 490-4888Email: jeff(a~.spark.law

Lawyers for the Creditor, Elie Khouri

ATTORNEY GENERAL OF CANADADepartment of Justice, Ontario Regional Office130 King Street WestSuite 3400, The Exchange TowerToronto, Ontario M5X 1 K6

MARIA VUJNOVICTel: 416 973-3304Fax: 416 973-0810Email: maria.vujnovic(c~iustice.gc.ca

Lawyers for the Canada Revenue Agency(File No. 9126452)

Court File No. CV-1 7-1 1 726-OOCL


COMMERCIAL LIST

BETWEEN:


Applicant

-and-


Respondent

INDEX

Tab Description

1 Notice of Motion, returnable November 14, 2017

2 Fifth Report of the Receiver dated November 1, 2017

A Appendix "A" —HST Return —July to September 2017

B Appendix "B" —Fees and Disbursements of the Receiver

C Appendix "C" —Fees and Disbursements of Fogler, Rubinoff LLP

3 Draft Discharge Order

4 Commercial List Model Order of Discharge (black-lined)



(COMMERCIAL LIST)

i:3~~~►~1~~~~


Applicant

- and-


Respondent

NOTICE OF MOTION(Returnable November 14, 2017)

The Fuller Landau Group Inc., the court-appointed receiver (the "Receiver") of

the properties, assets and undertakings of 2177427 Ontario Limited ("217"), will make a motion

to the Court on Tuesday, November 14, 2017 at 10:00 a.m., or as soon after that time as the

motion can be heard at 330 University Avenue, 8th Floor, Toronto, Ontario.

THE PROPOSED METHOD OF HEARING:

The motion is to be heard orally.

THE MOTION IS FOR an order:

1. if necessary, validating the service of this Notice of Motion, the Motion Record and the

Fifth Report of the Receiver dated November 1, 2017 (the "Fifth Report") so that this

Motion is properly returnable November 14, 2017 and dispensing with further service

thereof;

2. approving the Fifth Report and the activities of the Receiver as described therein;

-2-

3. approving the Receiver's Final Statement of Receipts and Disbursements included in the

Fifth Report;

4. approving the final fees and disbursements of the Receiver and its counsel as set out in

the Fifth Report;

5. subject to the payment of certain remaining items and the holdback for potential priority

claims including the HST Deemed Trust, and appropriate reserves being maintained by

the Receiver to complete the administration of the receivership including to pay all

outstanding and future professional fees as set out in the Fifth Report, authorizing and

directing the Receiver to make a final distribution of any remaining funds, if applicable, to

the third mortgagee, Elie Khouri;

6. discharging and releasing The Fuller Landau Group Inc. as Receiver of the Respondent;

and

7. such further relief as is just.

THE GROUNDS FOR THE MOTION ARE:

1. On April 7, 2017, the Receiver was appointed as court-appointed Receiver over the

assets, property and undertaking of 217, including the property municipally known or

commonly known as 500 Brisebois Crescent, Ottawa, Ontario K1 E OA6, which is used

in connection with the business operating the hotel known as Holiday Inn Express &

Suites-Orleans (the "Hotel") (collectively, the "Property") pursuant to the Order of Mr.

Justice Myers of the Ontario Superior Court of Justice (the "Appointment Order");

Sale of the Hotel

2. The Appointment Order authorizes the Receiver to, inter a/ia, market any or all of the

Property, including advertising and soliciting offers in respect of the Property or any part

or parts thereof and negotiating such terms and conditions of sale as the Receiver in its

discretion may deem appropriate (s. 3(k));

3. The Receiver was approached by interested parties who wished to purchase the Hotel.

As a result, the Receiver entered into a sale agreement with the Stalking Horse Bidder.

In light of the interest in the Hotel, the sale agreement was in the form of the Stalking

-3-

Horse APS. The offer or Stalking Horse APS was conditional upon court approval and a

stalking horse sale process being conducted by the Receiver;

4. Pursuant to the Order of Justice Cavanagh dated May 17, 2017 (the "Sale Process

Order"), the Court approved the Stalking Horse APS and approved the Receiver's

proposed stalking horse sale process (the "Sale Process");

5. Pursuant to the Sale Process Order, the Receiver or Receiver's broker or agent

(together, the "Receiver") commenced the Sale Process, including notifying potential

buyers, distributing a confidential information memorandum and establishing an

electronic data room;

6. The deadline for the submission of bids under the Sale Process was June 7, 2017;

7. On or before the Bid Deadline under the Sale Process, no Qualified Bid (other than the

Stalking Horse APS) was received by the Receiver;

8. The Sale Process provides that if the Receiver does not receive any Qualified Bids other

than the Stalking Horse APS, it will not hold an Auction, in which case the Stalking Horse

APS will be deemed the Successful Bid and the Stalking Horse Bidder will be named the

Successful Bidder and the Receiver will proceed towards completion of the Stalking

Horse Transaction;

9. The sale of the Purchased Assets under the Stalking Horse APS was subject to an

approval and vesting order being issued by the Court. Pursuant to the Sale Process, the

Receiver shall report to the Court and provide its recommendations to the Court

regarding the sale of the Purchased Assets by June 23, 2017 or as soon thereafter as

the Court may permit;

10. On June 23, 2017, pursuant to the Order of Justice Hainey, the Court granted an

approval and vesting order (the "Approval and Vesting Order") in favour of the

purchaser, 2583831 Ontario Inc., with respect to the Hotel. The sale transaction closed

on June 30, 2017 and on that date, the Receiver filed its Certificate of completion with

the Court;

Final Distribution

11. Under the Approval and Vesting Order, the Receiver was also authorized to pay off the

first and second mortgages on the Hotel, namely Romspen Investment Corporation

("Romspen") and HarbourEdge Mortgage Investment Corporation ("HarbourEdge"),

from the net sale proceeds arising from the Stalking Horse Transaction up to the amount

of the indebtedness owing to Romspen (the "Romspen Debt") and the amount of the

indebtedness owing to HarbourEdge (the "HarbourEdge Debt"). The Receiver has

paid the Romspen Debt and HarbourEdge Debt from the net sale proceeds from the sale

of the Purchased Assets or Hotel, extinguishing the first and second mortgages or the

Romspen Debt and the HarbourEdge Debt;

12. On July 21, 2017, pursuant to the Order of Justice Conway, the Court ordered, among

other things, that the Receiver make an interim distribution to the third mortgagee, Elie

Khouri, in the partial amount of the indebtedness owing to Elie Khouri under his

respective mortgage. The Receiver has paid Elie Khouri the partial amount of the

indebtedness owing to him under his respective mortgage as set out in the Fifth Report;

13. The CRA has made an HST Deemed Trust claim that has given rise to a priority dispute

with Elie Khouri under his respective mortgage as detailed in the Fifth Report. The

Receiver will continue to hold back the amount of the HST Deemed Trust (the

"Holdback for the HST Deemed Trust"} from any further distribution until there is an

agreed upon settlement between the parties or further order of this Court;

14. Subject to the Receiver's payment of certain remaining items and the Holdback for the

HST Deemed Trust and a reserve proposed by the Receiver for the completion of the

administration of the receivership including outstanding and future professional fees as

set out in the Fifth Report, any remaining funds available for final distribution, if

applicable, shall be paid to Elie Khouri;

15. In addition to the proposed final distribution, the Receiver seeks court approval of the

Fifth Report including approval of its final statement of receipts and disbursements and

its final fees and disbursements including those of its counsel;

16. the Applicant is supportive of or not opposed to the discharge of the Receiver; and

17. Such further grounds as are just.

-5-

THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the Motion:

1. the Fifth Report of the Receiver; and

2. such further and other materials as counsel may advise and this Honourable Court may

permit.

Date: November 2, 2017 FOGLER, RUBINOFF LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD CentreToronto, Ontario M5K 1 G8

Vern W. Dane (LSUC# 32591 E)Tel: 416-941-8842Fax: 416-941-8Lawyers for The Fuller Landau Group Inc.,in its capacity as court appointed receiverof the property of the Respondent

TO: Service List


ONTARIO

SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)

BETWEEN:

I3ARBOUREDGE MORTGAGE INVESTMENT CORPORATION

-and-


FIFTH REPORT OF THE FULLER LANDAU GROUP INC. IN ITS

Applicant

Respondent

CAPACITY AS COURT APPOINTED RECEIVERNOVEMBER 1, 2017

TABLE OF CONTENTS

I. INTRODUCTION AND BACKGROUND .....................................................................1

II. PURPOSE OF THIS REPORT ........................................................................................4

III. NOTICE TO READER .....................................................................................................5

IV. ACTIVITIES OF THE RECEIVER SINCE THE FOURTH REPORT .....................5

V. STATUS OF THE HOLDBACK FOR THE HST DEEMED TRUST .........................6

VI. FUNDS ON HAND AND ESTIMATED FUNDS AVAILABLE FORDISTRIBUTION................................................................................................................9

VII. PROFESSIONAL FEES .................................................................................................11

VIII. COMPLETION OF THE RECEIVERSHIP ADMINISTRATION ...........................12

IX. SUMMARY AND RECOMMENDATIONS .................................................................12

APPENDICES

A HST Return —July to September 2017

B Fees and Disbursements of the Receiver

C Fees and Disbursements of Fogler Rubinoff LLP

I. INTRODUCTION AND BACKGROUND

1. 2177427 Ontario Limited ("217" or the "Debtor") is an Ontario company incorporated on

June 25, 2008. 217 owned and operated a 5 storey Holiday Inn Express hotel (the "Hotel

Business") located on approximately 1 acre of land at 500 Brisebois Crescent, Ottawa,

Ontario (the "Hotel Property"). The Hotel Property has approximately 100 rooms,

including 51 suites, an indoor pool, fitness centre, meeting rooms, and a parking lot with

approximately 100 spaces.

2. By an order of the Ontario Superior Court of Justice (the "Court") dated April 7, 2017 (the

"Receivership Date"), The Fuller Landau Group Inc. was appointed receiver (the

"Receiver") of the assets, undertaking and property of 217 (the "Property")

3. The First Report of the Receiver dated May 10, 2017 (the "First Report") provided the Court

with information on the:

(a) activities of the Receiver since the Receivership Date;

(b) details of the Hotel Property;

(c) the Receiver's plans to offer the Hotel Property for sale, including:

(i) the terms of the stalking horse asset purchase agreement (the "Stalking

Horse APA") entered into by the Receiver with the Purchaser (as defined

in tl~e Stalking Horse APA) for the sale of the Hotel Property including the

Break Fee (as defined in the Stalking Horse APA); and

(ii) the details of the proposed marketing process and proposed bidding

procedures;

(d) the funds paid to Canada Revenue Agency ("CRA") from 217's bank account prior

to CRA cancelling the Requirement to Pay notice sent by CRA to the Toronto

Dominion Bank (217's operating bank) on April 10, 2017 (the "Requirement to

Pay") related to HST arrears of 217 (the "HST Arrears");

(e) the issues regarding priority to the Security Funds (as defined in the First Report)

paid into Court by 217, as part of the Wildwood Litigation (as defined in the First

Report);

(~ the Receiver's statement of receipts and disbursements to May 9, 2017; and

1

(g) the fees and. disbursements of the Receiver and its independent legal counsel, Fogler

Rubinoff LLP ("Fogler"), billed to date.

4. On May 17, 2017, the Court issued an order:

(a) approving the First Report and the conduct and activities of the Receiver described

therein;

(b) approving the Stalking Horse APA, and the Break Fee;

(c) approving the Sale Process and the Bidding Procedures;

(d) setting a retuxn date of July 7, 2017 regarding the determination of priority to the

Security Funds paid into Court by 217 as part of the Wildwood Litigation;

(e) sealing the Confidential Appendices to the First Report until the completion of a

sale of the Hotel Properly, or until further Order of this Court;

(~ approving the Receiver's statement of receipts and disbursements to May 9, 2017;

and

(g) approving the fees and disbursements of both the Receiver and Fogler as set out

therein.

5. The Second Report of the Receiver dated June 15, 2017 (the "Second Report"), provided the

Court with information on:

(a) the Receiver's activities since the First Report;

(b) the results of the Sale Process;

(c} the terms and conditions of the Accepted APA (as defined in the Second Report),

which had been accepted by the Receiver for the sale of the Hotel Property (the

"Sale Transaction"), subject to approval by the Court;

(d) estimated potential priority claims against 217;

(e) the review completed by Fogler regarding the validity and priority of the First

Mortgage and the Second Mortgage;

(~ the Receiver's statement of receipts and disbursements to June 13, 2017; and

(g) the fees and disbursements of the Receiver and Fogler.

6. On June 23, 2017, the Court issued an order:

2

(a) approving the Second Report and the conduct and activities of the Receiver

described therein;

(b) approving the Sale Transaction in accordance with the terms and conditions set out

in the Accepted APA;

(c) on a successful closing of the Sale Transaction, vesting in the Purchaser (as defined

in the Accepted APA) all of the Debtor's right, title and interest in the Purchased

Assets (as defined in the Accepted APA), free and clear of all liens, claims and

encumbrances except as provided for in the Accepted APA or the said court order;

(d) sealing the Confidential Appendices to the Second Report, in order to preserve the

integrity of the Sale Process, until the completion of the Sale Transaction, or until

further Order of the Court;

(e) authorizing the payout of the First Mortgage and Second Mortgage indebtedness

following completion of the Sale Transaction; and

(~ approving the fees and disbursements of the Receiver and Fogler as set out therein.

7. The Third Report of the Receiver dated June 27, 2017 (the "Third Report"), provided the

Court with information on the results of the Receiver's efforts to settle the priority issues

regarding the Secuxity Funds paid into Court by 217, as part of the Wildwood Litigation.

8. On July 7, 2017, the Court issued an order:

(a) approving the Third Report and the conduct and activities of the Receiver described

therein; and

(b) approving the minutes of settlement (the "Settlement") entered into by the

Receiver, Wildwood, Bhupinder Sandhu, and the Debtor to settle the priority issues

and allowing for a motion to be filed directing the Court or Accountant of the

Superior Court of Justice in the Wildwood Action (as defined in the Third Report}

to release the Security Funds to the Receiver to be paid pursuant to the Settlement,

and dismissing the Wildwood Action without costs.

9. The Fourth Report of the Receiver dated July 14, 2017 (the "Fourth Report"), provided the

Court with information on:

(a) Receiver's activities since the Second Report;

(b) the closing of the Sale Transaction;

(c) status of potential priority claims against 217;

(d) the validity of the third mortgage held by Elie Khouri (the "Khouri Mortgage")

and the priority between the Khouri Mortgage and the deemed trust claim of the

Canada Revenue Agency for the HST Arrears;

(e) the Receiver's statement of receipts and disbursements to July 10, 2017 and the

Receiver's estimate of funds available for distribution at completion of the

receivership administration;

(~ remaining issues in the receivership administration; and

(g) the fees and disbursements of the Receiver and Fogler.

10. On July 21, 2017, the Court issued an order (the "July 21St Order):

(a) approving the Fourth Report and the conduct and activities of the Receiver

described therein;

(b) approving the statement of receipts and disbursements to July 10, 2017;

(c) authorizing paying remaining receivership funds, net of and subject to a reserve or

holdback for final receivership costs, priority claims, and approved professional

fees and disbursements towards the Khouri Mortgage Indebtedness;

(d) the Endorsement of Madam Justice Conway dated July 21, 2017 (the

"Endorsement of Conway J. dated July 21st") stated that the distribution of funds

towards the Khouri Mortgage Indebtedness is subject to the Receiver holding back

the amount of the HST Deemed Trust (as described below); and

(e) approving the fees and disbursements of the Receiver and Fogler as set out therein.

II. PURPOSE OF THIS REPORT

11. The purpose of this fifth report of the Receiver (the "Fifth ReporY') is to:

(a) provide the Court with information on the:

(i) Receiver's activities since the Fourth Report;

(ii) the remaining duties of the Receiver necessary to complete the receivership

administration;

4

(iii) Receiver's statement of receipts and disbursements and estimated funds

available for distribution; and

(iv} fees and disbursements of the Receiver and its legal counsel;

(b) recommend to this Court that it issue order(s):

(i) approving the activities and items described in (a} above; and

(ii) discharging the Receiver, subject to the Receiver completing its

administration of the receivership proceedings and distributing the funds

held by the Receiver in the manner more particularly described herein, and

the filing of a certificate with the Court confirming that the Receiver has

completed all of its remaining administrative duties.

12. For reference purposes, any capitalized terms not otherwise defined in the Fifth Report shall

have the meanings ascribed to them in the First Report, the Second Report, the Third Report

and/or the Fourth Report.

13. All amounts referred to in the Fifth Report are in Canadian dollars unless otherwise noted.

III. NOTICE TO READER

14. This report is prepared solely for the use of the Court, for the purpose of assisting the Court in

making a determination whether to approve the relief being sought. It is based on the

Receiver's analysis of information provided to it by the management and the officers and

director of the Debtor, which includes unaudited financial statements and internal financial

reporting. The Receiver's procedures did not constitute an audit or review engagement of the

Debtor's financial reporting. The Receiver has relied upon the financial statements and

financial and other records of the Debtor in reaching the conclusions set out in this report.

IV. ACTIVITIES OF THE RECEIVER SINCE THE FOURTH REPORT

15. The activities of the Receiver since the Fourth Report include:

(a) requesting and reviewing operating invoices for payment and cancelling and/or

transferring certain of the Debtor's supply, utility and telecommunications accounts,

and lease contracts to the Purchaser;

(b) discussions with CRA, regarding 217's deemed trust obligation for non-payment of

deductions made from royalties paid to IHG, the licensor of the Hotel Business, (the

5

"Deemed Trust for Withholdings from Royalties"), and retaining and working with

the Debtor's accountants to calculate the amount of the Deemed Trust for

Withholdings from Royalties and to prepare the appropriate NR4 tax returns for 217

from 2014 to 2017 (which relate to the withholdings from royalties paid), and signing

and sending the NR4 tax retuxns for 217 along with payment of the deemed trust

obligation to CRA;

(c) updating the calculation of amounts payable to the Purchaser for the operating profits

of the Hotel Business for the month of June 2017 pursuant to the terms of the Asset

Purchase Agreement and making advance payments;

(d) updating the net funds available for payment towards the Khouri Mortgage

Indebtedness and making advance payments;

(e) responding to inquiries from creditors of 217; and

(fl updating and maintaining of accounting records and all other administrative duties

related to the receivership administration.

V. STATUS OF THE HOLDBACK FOR THE HST DEEMED TRUST

16. As reported in the Fourth Report, the priority issues regarding the HST Deemed Trust (defined

below) for HST can be suininarized as follows:

(a) following the issuing of the Receivership Order, the Receiver contacted the Toronto

Dominion Bank and CRA to inform them of the Receivership Order, and as a result,

CRA cancelled the Requirement to Pay.

(b) CRA sent a letter to the Receiver dated June 16, 2017 advising the Receiver of the

outstanding HST Arrears, which had arisen since February 1, 2016 (the "Deemed

Trust Commencement Date"} and totaled approximately $281,000 including

penalties and interest by the Receivership Date, and that $272,455 of that total were

deemed to be held in trust (the "HST Deemed Trust") pursuant to subsection 222(3}

of the Excise Tax Act (Canada).

(c) a search of the Land Titles Registry shows, among other things, that the First

Mortgage, the Second Mortgage and the Khouri Mortgage were registered against

title to the Hotel Property prior to the dates when the HST Arrears arose. The

Receiver's initial view is that each of the First Mortgage, the Second Mortgage and

the Khouri Mortgage appear to be "Prescribed Security Interests", which pursuant to

the regulations of the Excise Tax Act (Canada) (the "ETA"} may have priority over

the HST Deemed Trust.

(d) the Receiver contacted the CRA representative who signed the June 16th CRA Letter

regarding the Receiver's position. The CRA representative requested copies of the

search of the Land Title Registry as well as a summary of the mortgages registered.

On June 27, 2016, the Receiver sent the requested information to the CRA

representative.

(e) on July 13, 2017, the CRA representative contacted the Receiver regarding the status

of the HST Deemed Trust and the calculation to determine the potential deduction for

Prescribed Security Interests. Following the discussion, CRA sent a letter to the

Receiver requesting information to assist CRA with the determination of the amount

of the Prescribed Security Interests.

(f} the Receiver reviewed the relevant regulations of the ETA regarding the calculation of

Prescribed Security Interests (Interpretation SOR/2011-55 dated March 3, 2011),

which discusses the calculation of Prescribed Security Interests, which is summarized

as follows:

For the purpose of subsection 222(4) of the Act, a prescribed security interest, inrelation to an amount deemed under subsection 222(1) of the Act to be held in trustby a person, is that part of a mortgage or hypothec securing the performance of anobligation of the person that encumbers land or a building, but only if the mortgage orhypothec is registered pursuant to the appropriate land registration system before thetime the amount is deemed under subsection 222(1) of the Act to be held in trust bythe person.

(2) For the purpose of subsection (1), if, at a particular time, an amount deemed to beheld in trust by the person referred to in that subsection is not remitted to the ReceiverGeneral or withdrawn in the manner and at the time provided under Part IX of theAct, the amount of the prescribed security interest referred to in that subsection maynot exceed the amount determined by the following formula until such time as allamounts deemed under subsection 222(1) of the Act to be held in trust by the personare withdrawn in accordance with subsection 222(2) of the Act or are remitted to theReceiver General:

Where

A is the amount of the obligation secured by the mortgage or hypothec that isoutstanding at the particular time; and

Bis the total of

(a) all amounts, each of which is the value determined at the particular time, havingregard to all the circumstances including the existence of any deemed trust for thebenefit of Her Majesty pursuant to subsection 222(1) of the Act, of all the rights ofthe secured creditor securing the obligation, whether granted by the person or not,including guarantees or rights of set-off or of compensation but not including themortgage or hypothec referred to in subsection (1), and

(b) all amounts applied after the particular time on account of the obligation.

(3) A prescribed. security interest under subsection (1) includes the amount of anyinsurance or expropriation proceeds relating to land or a building that is the subject ofa registered mortgage interest or registered hypothecary right, adjusted in accordancewith subsection (2), but does not include a lien, a priority or any other securityinterest created by statute, an assignment or hypothec of rents or leases, or a mortgageinterest or hypothecary right in any equipment or fixtures that a mortgagee,hypothecary creditor or any other person has the right absolutely or conditionally toremove or dispose of separately from the land or building.

(g) HarbourEdge held unlimited guarantees from Bhupinder Sandhu, Jasmeet Sandhu and

2171052 Ontario Limited against the mortgage amounts owing by 217 at the Deemed

Trust Commencement Date.

(h) the Receiver understands that Elie Khouri also holds unlimited guarantees against the

Khouri Mortgage Indebtedness owing by 217.

(i) the mortgage balances of the First Mortgage, the Second Mortgage and the Khouri

Mortgages at the Deemed Trust Commencement date totaled approximately

$15,770,000 consisting o£

(a) First Mortgage - $10,848,000

(b) Second Mortgage — 3,249,000

(c) Khouri Mortgage - $1,673,000

(j) the Receiver has been advised by HarbourEdge that the payments made on the First

Mortgage and the Second Mortgage since the Deemed Trust Commencement Date total

approximately $1,391,000. The Receiver understands that no payments were made on

the Khouri Mortgage since the Deemed Trust Commencement Date.

(k) Fogler advised the Receiver that it has completed an independent review of the Khouri

Mortgage security, and that subject to certain standard assumptions and qualifications,

Fogler's independent review concluded that the Khouri Mortgage is valid and

enforceable priority security over the Hotel Property.

(1) based on the formula discussed above, the amount of the Prescribed Security Interests

would be $14,379,000 (the amount of the mortgages at the commencement of the HST

Deemed Trust of $15,770,000 less payments received of $1,391,000) less the value of

the unlimited guarantees, which the Receiver is unable to be determine.

17. On October 10, 2017, the Receiver filed the HST return for 217 for the period from June 1 to

September 30, 2017, which shows a HST refund of $27,596.31. This amount should be

deducted from the HST Deemed Trust Holdback, which is now $244,859.54 ($272,455.851ess

$27,596.31). A copy of the HST return filed by the Receiver is attached hereto as Appendix«A»

18. The Receiver has been in regular contact with Mr. Khouri who advises that despite discussions

with CRA there has been no final resolution of the priority issues regarding the HST Deemed

Trust to date. In accordance with the Endorsement of Conway J. dated July 21St, the Receiver

will continue to hold back the amount of the HST Deemed Trust (the "Holdback for the HST

Deemed Trust") from any further distribution until there is an agreed upon settlement between

Mr. Khouri and CRA or further order of this Court.

VI. FUNDS ON HAND AND ESTIMATED FUNDS AVAILABLE FOR DISTRIBUTION

19. All of the Property capable of realization has been realized by the Receiver. The Receiver

does not anticipate receiving any further invoices relating to the Receiver's cost of operating

the Hotel Business from the Receivership Date to the closing of the sale of the Hotel Property.

20. Pursuant to the terms of the APA, the Purchaser was entitled to the operating profits of the

Hotel Business for the month of June 2017. On the closing date of June 30, 2017, the Receiver

instructed the bank to freeze 217's operating bank account for the Hotel Business (the

"Operating Bank Account"). The Purchaser did not open new accounts with credit and debit

card merchants until late July and receipts relating to the Hotel Business since June 30, 2017

(which belonged to the Purchaser) continued to be deposited to the Operating Bank Account.

Since the Operating Bank Account was frozen, debits for credit and debit card commissions

relating to receipts from June 30, 2017 totaling $17,715 were not paid from the Operating Bank

Account. The Receiver has not received any notice from the credit and debit card merchants

regarding these amounts. The Receiver advised the Purchaser that it would not release these

amounts to the Purchaser without receiving an indemnity against any claims from the credit

E

and debit card merchants. The Purchaser provided an indemnity in a form suitable to the

Receiver, and the Receiver paid the final balance of amounts related to the operating profits

from June 2017, which include the credit and debit card commissions not deducted, to the

Purchaser. All amounts due to the Purchaser have now been settled.

21. The Receiver has prepared a statement of receipts and disbursements for 217 to November 1,

2017 (the "Statement of Receipts and Disbursements to November 1, 2017"), which shows

net funds on hand of $357,157, and is summarized as follows:

2177427 Ontario Limited

Statement of Receipts and Disbursements to November 1, 2017

Receipts

Sale of Hotel Property 18,000,000

Less: June operating profits paid to Purchaser- see Note 268,051 17,731,949Hotel revenues 1,185,086Net settlement funds 95,815

Miscellaneous refunds 27,566Returned credit and debit card Commissions since June 30, 2017- see Note 17,715

19, 058,131

Disbursements

Property taxes 626,339

Hotel operating costs 439,310

HST 160, 751

Holiday Inn royalties 147,126

Real estate commission 15,000

Accounting services 12,000

1,400, 527

17, 657, 604

Professional Fees 322,316

17, 335, 289

Less: Priority Claims:

Withholding taxes on Royalty Payments 32,904

17, 302, 384

Less: Distributions to Mortgagees 16,945,227

Cash on Hand 357,157

Note -June operating profits paid to Purchaser include returned credit and debit

card commissions not deducted from revenues subsequent to June 30, 2017

10

22. The Receiver has also prepared a statement of estimated funds available for distribution, net

of estimated final costs and the Holdback for the HST Deemed Trust, which shows funds

available for distribution of approximately $72,297, summarized as follows:


Estimated Funds Available for Distribution

As at November 1, 2017

Cash on Hand

Less: Esfimated professional fees to completion

Holdback for Potential Deemed Trust for HST arrears - CRA

Less: accrued HST refund - July to September 2017

Estimated Funds Available for Distribution

VII. PROFESSIONAL FEES

357,157

40, 000

317,157

272,456

27,596 244,860

72, 297

23. The Receivership Order directs and empowers the Receiver to pass its accounts from time to

time, and to include any necessary fees and disbursements of its legal counsel in the passing

of its accounts.

24. Pursuant to paragraph 18 of the Receivership Order, the fees and disbursements of the Receiver

and its legal counsel form a first charge on the Property in priority to all security interests,

trusts, liens, charges and encumbrances, statutory or otherwise, in favour of any person, but

subject to sections 14.06(7), 81.4(4), and 81.6(2) of the BIA.

25. The fees and disbursements of the Receiver invoiced for the period ending June 30, 2017 were

approved by the July 21St Order. The fees and disbursement of the Receiver for the period

ending September 30, 2017 total $51,173.69 (excluding HST). Full particulars of the fees and

disbursements of the Receiver from July 1, 2017 to September 30, 2017 are set out in the

Affidavit of Ken Pearl sworn on November 1, 2017, which is attached hereto as Appendix "B".

In addition, the remaining professional fees and disbursements of the Receiver to complete the

receivership administration are estimated to be $25,000 (excluding HST).

26. The fees and disbursements incurred for services provided by Fogler invoiced for the period

ending June 25, 2017 were approved by the July 21st Order. The fees and disbursements of

Fogler for the period ending July 21, 2017 total $39,537.12 (excluding HST). Full particulars

~ 1

of the fees and disbursements of Fogler from about June 26, 2017 to July 21, 2017 are set out

in the Affidavit of Jared Schwartz sworn on October 27, 2017, which is attached hereto as

Appendix "C". In addition, the remaining professional fees and disbursements of Fogler to

complete the receivership administration are estimated to be $15,000 (excluding HST).

VIII. COMPLETION OF THE RECEIVERSHIP ADMINISTRATION

27. The remaining administrative duties of the Receiver include:

(a) completing and filing of final HST, income t~ and other statutory returns for 217;

(b) payment of remaining:

(i) operating costs of the receivership administration, if any

(ii) approved professional fees and disbursements;

(c) paying the Holdback for the HST Deemed Trust;

(d) paying the net funds available for distribution towards the Khouri Mortgage

Indebtedness; and

(e) filing the Receiver's final reports pursuant to section 246 of the BIA.

IX. SUMMARY AND RECOMMENDATIONS

28. The realization of the assets of 217 is complete.

29. The Receiver does not anticipate any further significant receipts or disbursements than what is

shown in the Statement of Receipts and Disbursements to November 1, 2017.

30. The Third Mortgagee will incur a significant shortfall, and as a result, there will be no

remaining funds available for unsecured creditors.

31. The funds remaining net of holdbacks for final costs and the Deemed Trust Holdback will be

paid towards the Khouri Mortgage Indebtedness.

32. The Receiver can be discharged subject to completion of its final administrative duties.

33. The Receiver respectfully requests that this Court grant an Order:

(a) approving the Fifth Report and the conduct and activities of the Receiver describedherein;

(b) approving the Statement of Receipts and Disbursements to November 1, 2017;

(c) approving the fees and disbursements of the Receiver and Fogler as set out herein.

(d) discharging the Receiver, subject to the Receiver completing its administration of the

receivership proceedings and distributing the funds held by the Receiver in the

12

rr~anner more pai-~icularly described herein,. and the filing. of a cert~eate with fhe

Court confirming that the Receiver has completed. all of the-steps necessary in the

Receivership proceedings.

This Report is respeef~ully submitted. to this C~~trt as of this 1st tiay of November 2017.

THE FULLER LANDATJ GROUP INC.,solely in its capaci#y as Court-appointed Receiver of2177427 Ontario Lir~utedand. not in its personal or corparate capacityPer: ~

~~v

Ken Pearl, MBA, CPA, CA•CIRP, LITSenior Vice President

13

GST/HST NETFILE -confirmation

Government Gouvernementof Canada du Canada

Canada Revenue Agency

GSTIHST NETFILE -confirmationYour return has been successfully filed.

Your confirmation number is: 217075.

Business number: 85795189'( RT0002

Business name: 2177427 ONTARIO LIMITED

Reporting period: 2017-09-01 to 2017-09-30

Filing date: 2017-10-'10

Line 101 -Sales and a#her revenue

Line 135 -Total GST/HST new housing rebates (included in line

108)

Line 136 -Deduction for pension rebate amount (included in

line 108}

Line 105 -Total GST/HST and adjustments for period

Line 108 -Total ITCs and adjustmen#s

Line 109 -Net tax

Line 110 -Instalments and other annual filer payments

Line 111 -Rebates (note: rebate forms must be mailed

separately)

Line 205 - GST/HST due on acquisition of taxable real property

Line 405 -Other GST/HST to be self-assessed

Line 114 -Refund claimed

Line 115 -Amount owing

Page 1 of I

Canada

$0.00

$O.OQ

~,~ ~~

~o.oa$27, 596.31

$-27, 596.31

~o.oa$0.00

~o.oa~a.00$27,596.31

$0.00

https:/lapps.cra-arc.gc.calebci/ghnf/netf/filereturn/prof/displayGSTReturnConfirmation.do 10/10/2017



(Commercial List)

BETWEEN:

HARSOUREDGE MORTGAGE INVESTMENT CORPORATION

Applicant

-and-


Respondents

AFFIDAVIT OF KEN PEART.

I, KEN PEARL, of the City of Vaughan, in the Province of Ontario, MAKE

OATH AND SAY, as follows:

1. I am a Senior Vice President of The Fuller Landau Group Inc. ("Fuller"), which was

appointed as the receiver (the "Receiver") of 2177427 Ontario Limited {the "Company")

pursuant to an Order of Mister Justice Myers dated April 7, 2Q17. As such, I have

knowledge of the matters to which I hereinafter deposed to, except where stated to be on

information and belief and whereas stated I verily believe such to be true.

2. Attached a11d marked Exhibit "A'' to this my affidavit is a true copy of the detailed

billing setting out the fees and disbursements of Fuller incurred. in its role as Receiver

of t11e Company for the period from July 1 to September 30, 2017 (the

"Accoant"), in the amount of $51,1.73.69 (comprising fees of $50,572.50 and

disbursements of $b01.19) together with HST in the amount of $6,652.58, totaling

$57,826.27.

3. The Account includes a suznmaty providing the names of the- personnel providing the

services reflected in die Accounts, the number of hours spent by such personnel and their

hourly rate. Total fees are $SQ,572.50 and total hours are 1.54.74, resultiY~g in an average

hourly rate of $326.82.

4. I believe the hourly rates and the total amount of fees are reasonable and comparable

for insolvency services of this nature rendered by other firms in the City of Toronto.

5. This affidavit is sworn in connection with the approval of the fees and disbursements

of Fuller and far no improper purpose.

SWORN BEFORE ME at theCity of Toronto, this ~ ~:.` "day of November 2017

~~r, f

A Commissioner for Taking :Affidavits, etc.

~ ~

f

KEN PEARL

Minna Linda Niva, a Commissioner, etc.,Province of Ontario, for The Falfer LantlauGroup Inc, and its associates and affiliates.Expires August 20. 2018.

Attached is Exhibit "A"

Referred to in the

AFFIDAVIT OF KEN PEARL

Sworn before ine

This l s~ day of November 2017

~(~ I

Commissioner for taking Affidavits, etc..

,Minna Linda Niva, a Commissioner, etc.,Province of Qntario, for The Fuller LandauGroup Inc, and its associates and afliliafes.Expires August 20, 2018.

The Fuller Landau Group tnc.

In its Capacity as

Court Appointed Receiver of


Summary of Fees and Disbursements Kilted to September 30, 2017

The Fuller Landau Group Inc.

Invoice invoice Invoice

Date No. Hours Fees Disbursements Total HS7 Total

July 31, 2017 122097 67.65 23,701.25 403.05 24,104.30 3,133.56 27,237.86

August 31, 2077 122572 69.72 21,155:00 140.15 21,295.15 2,768.37 24,063.52

September 30, 2017 122919 17.37 5,716.25 57.99 5,774.24 750.65 6,524.89

Total 154.74 50,572.50 601.19 51,173.69 6,652.58 57,826.27

_ - ~ TH Flt LL~.~_ _,~ LAN ~AIJ G I~ IJ P~~~

Ju(y 31, 2017

2177427 Ontario Limitedc/o The Fuller Landau Group (nc.151 Sloor St. W. 12th doorToronto, ON M5S 1S4

A#tention: Mr. Ken Pearl

~~V~~~~

Invoice No. 922097

Client No. 930T379:0~ KLP

'f0 PROFESS[ONAL SERVICES RENDERED:

With respect to our appointment as Court Appointed Receiver of 2177427 Ontario Ltd. for the periodending July 31, 2017 as set out in the attached detailed time dockets.

OUR STANDARD FEE

K. Pearl - 36.00 hrs. @ $475.00/hr.M. Glowinsky - 20.813 hrs. @ $200.00lhr.M. Niva -10.85 hrs. @ $225.00thr.

Qurfee .................................>..........................................._......................................... $ 23,701.25

Disbursements.......................................................................................................... 403.05

Subtotal .............................................................................................._...................... 24,'{ 04.30

HS7............................................................................................................................ 3,133.56

BALANCE DUE ......................................................................................................... $ 27,237.86

Note:

Disbursements =Courier charges

NST Registration No. 81307956&9

Payment is due on receipt of account.Amount outstanding in excess of thirty days wi!! be charged interest at 12~ per annum until paid in full.

Please remi# to:THE FULLER LANDAU GROUP INC.Acets Receivable151 Bloor Street West,12th FloorToronto, OntarioCanada M55 1 S4 Toronto, Hamilton

TeL• (416) 645-6500Fax: {41~ 645-6501

www.fullerlip.com

..

2177427 Ontario LimitedJuly 31, 2017 Page 2

Client No. 1307379:09KLP lnvaiceNo. 922097 /nvaiceAmt. $27,237.86.

..

Cartlholders Name:

-.,

Credit Card Type: ❑ Visa ❑ MasterCard GVD:

Credit Card Number: Ex iration Date:

Si nature; Date:

Please remit to:THE CULLER LANDAU GROUP INC.Accts Receivable151 Bloor Street West,12th F€oorToronto, OntarioCanada M5S 1 S4 Toronto, Hamilton

Tet: (416) 64b-65D0Fax: (416) 645-6501

www.fuilerllp.com

Fuller Landau L.LP02 Aug, 2017 Page 1 of 6

Billing Worksheet

Primary Partner- Client CodeFilters Used:

- Time Expense Date: 2000-01-01 to 2017-07-31- Engagement Name: 2177427 Ontario Limited to 2177427 Ontario Limited

Primary Partner: Pearl, Ken (KLP)

Master Client: 1307379 - 2177427 Ontario Limited1307379:g1 - 2177427 Ontario Limited - VCLP

Retainer Balance WIP0,00 24,104.30

WIP Memo

- Client -- Couriers FEpEX COURIER 12/0712017 Ship Date: June 15

--- Client -- Couriers FEDEX COURIER 12/07/2017 Ship Date: June 8

--- Client -- Couriers FEQEX COURIER 26/07!2017 Ship Date: June 22

-- Client - Couriers FEDEX CQURIER 26107/2017 Ship Date: June 30

-- Client - Couriers FEDEX COURIER 26/07!2077 Ship Date: June 30

--- Client - Couriers FEDEX COURIER 26/07/2017 Ship Date: July 4

--- Client - Couriers FEDEX COURIER 26!07/2017 Ship Date: July 5

-- Client -- Couriers FEDEX COURIER 26/07/2017 Ship Date: July 5

--- Client --- Couriers FEDEX COURIER 26/07/2017 Ship Qate: July 5

-- Glient --- Couriers FEDEX COURIER 26/07!2017 Ship Date: June 30

-- Client -- Couriers FEDEX COURIER 26/07/2017 Ship Date: June 30

-- Client --- Couriers FEDEX COURIER 26/07/2017 Ship Date: July 5

Client Totals:

CRI AGT AGT80 General



KLP 04/07l2D17 Sign insurance cancellation form and send to broker tocancel coverage; email exchange with Greg Parker re:status of release of funds paid into Court related toWildwood; review June operating invoices including d/wJasmeet re: final payroll and vacation pay to June 30th;d/w Vern page re: completion of trust accounting forsale of the hotel property and wiring net proceeds to theReceiver;

KLP 0 510 712 0 1 7 Review vacation pay arrears schedule prepared byJasmeet; dlw Jasmeet re: status of pre-filing AR;prepare draft statement of adjustment owing toPurchaser and statement of estimated funds availablefor distribution; dlw TD re: approving wire to ADP forfinal payroll; d/w Sysco re: final statement of accountduring receivership;

KLP 06!07/2017 D/w Purchaser re: advancing payment of theAdjustment and coordinate payment with TD Bank;

Progress0.00

Rate.

$0,00

$0.00

$0.00

$0.00

$0.00

$O.OD

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00.

$475.00

Net WIP2A,104.30

Hours

1.90

AR BalanceO.OD

Amount

27.26

33.80

z7.zs

71.18

27.06

30.83

29.90

32.92

23.86

33.10

32.92

32.92

403.05

902.50

$475.D0 3.20 1,520.00

$475.00 0.40 190.OQ

Fuller Landau LLP02 Aug, 2D17

Billing Worksheet

Primary Partner - Ciient CodeFilters Used:

- Time Expense Date: 2000-01-01 to 2017-07-31- Engagement Name; 2177427 Ontario Limited to 2177427 Ontario Limited

Primary Partner: Peari, Ken (KLP)

CRI AGT AGT80 General KLP 10/07(2017 Review and dIw Jasmeet ofpre-receivership vacation X475.00 1..30



CR) AGT AGT80 General

pay arrears; request and d/w suppliers re: finaloperating invoices to June 30; d/w Vern Dane re:estimated funds available for distribution to thirdmortgagee net of appropriate holdbacks; d/w creditorre: pre-receivership arrears;

KLP 11/07/2017 Draft Fourth Report to request Court approval for $475.00 2.8Cdistribution to Third Mortgagee and to inform of HSTdeemed (rust and prescribed security interest priorityissue; forward lease assumption documents fromNational Leasing to Purchaser;

KLP 1 2/0 712 0 1 7 Work on Fourth Report; d/w Jasmeet re: calculating $475.00 2.3CW516 premium due for receivership period;

KLP 1 310 7/2 0 1 7 Complete draft of Fourth Report including updating $475.00 4.8CR&D for operating and. trust accounts, es#imatedadjustment payable to Purchaser for June operatingprofits, prepare and assemble appendices; d/w VernDane and make revisions to daft; review of final BellCanada invoice and d/w transfer of phone numberw/Purchaser; d/w pat Confalone of CRA and review faxof requested information and request mortgagebalance, accrued interest and payments recd on amonthly basis from Feb 1/16 to March 31117 fromHarbourEdge; d/w Vern Dane re: calculation ofprescibed security interests issues including: values ofguarantees, monthly interest accrual on mortgages,impact of subordination agreement b/n HarbourEdgeand Khouri;

s~7.en

1,330.00

1, 092.50

2,280.00

Page 2 of 6

Fuller Landau LLP

02 Aug, 2017 Page 3 of 6

Billing Worksheet

Primary Partner-Client Code

Filters Used:- Time F~cpense Oate: 2000-01-01 to 2017-07-31- Engagement Name: 2177427 Ontario Limited to 2177G27 Ontario Limited

Primary Partner: PearB, Ken (KLP)

CRI AGT AGTBD General KLP 14/07/2017 D/w Vern Da Re re: priority issue re: deemed trust claim $475.00

of GRA re: HST and prescribed security interests of

mortgagee; review articles, revise report, finalize and

sign off; d/w Elie Khouri and his legal counsel re: issues

re: prescribed security interest and priority; receive

payout from Court re: funds held in Wildwood Action

and approve payment to Wildwood pursuant to terms of

approved Settlement; review IHG statement re: June

royalties;

CRI AGT AGT80 General KLP 17!0712017 Send copy of motion record to Pat Confalone of CRA $475.00

and leave voice mail to discuss prescribed security

interestand priority issue with mortgagees; email

exchange with insurance broker re: cancellation of

policy and potential premium refund; d/w HarbourEdge

re: information requested by CRA re: mortgage interest

and payments recd; review expenses claimed by

Jasmeet with Pllichael; review mortgage payment

schedule prepared by Michael;d/w Purchaser re: status

of arrangements made with credit card vendors so we

can close out operating bank account; d/w Jasmeet re:

preparing payment ofpre-filing vacation pay arrears

thru ADP;

CRI AGT AGT80 'General KLP 18/07/2017 D/w representative of City of Ottawa Water Services re: $475.00

statutory support for priority of pre-receivership arrears;

review Municipal Act and discuss issue with Vern

Dane;

4.30

Z.p~

1.20

2,042.50

1, 377.50

570.00

Fuller Landau LLi'02 Aug, 2D17 Page 4 of 6

Billing Worksheet

Primary Partner -Client Gode

CRI AG7 AGT80 General



KLP

KLP

KLF'

CRI AGT AGT80 General KLP

07/2017 Reviaw ADP forms to pay vacation pay arrears and X475.00approve wire transfer to ADP with Greg McLaren of TDBank; review of mortgage schedule from Feb 2016 toMarch 2017 prepared by HarbourEdge and update draftschedule and dJw Vem Dane; d/w legal counsel to ElieKhouri re: understanding of Prescribed Security Interestand send mortgage documents as requested; d/w VicVandergust, caunsei to HarbourEdge re: DOJ Notice of

Appearance;

20/D7l2017 Make arrangements with Greg Parker re: payment of $475.00

legal fees on Wildwood settlement;

21/0712017 Meet with DOJ counsel, Elie Khouri and his counsel to $475.00discuss calculation of prescribed security interests andholdback pending resolution; attend in Court for hearingof Fourth Report; dlw Purchaser re: arrangements fornew merchant accounts; d!w Jasmeet re: requestingfinal invoices; d/w Minna re: arrangements to reconcileAdjustment payable to Purchaser;

2A/07/2017 Update R&D and schedule showing estimated funds X475.00

available for distribution and d/w Elie Khouri; d!w City ofOttawa re; statement of water arrears to June 30th; d/wJasmeet re: NST and revenues for manual depositsrelating to June;

25!0712017 D/w Purchaser re: plans for closing operating account $475.00

and determining amount of Adjustment for June;

1.80

0.30

2.4D

855.00

142.SD

1,140.00

2.60 1,235.00

0.40 190.00

Filters Used:- Time Expense Date: 2000-01-D1 td 2017-07-31- Engagement Name: 2177427 Ontario Limited to 2177427 Ontario Limited

Primary Partner: Pearl, Ken (KIP)

CRI AGT AGT80 General KIP 19!

Fuller Landau LLP02 Aug, 2017 Page 5 of 6

Billing Worksheet

Primary Partner- Client CodeFilters Used:

- Time Expense Date: 200D-01-01 to '2017-D7-31- Engagement Name: 2177427 Ontario Limited to 2177A27 Ontario Limited


CRI AGT AGT80 General KLP 26/07/2017 Diw Vern Dane re; estimated fees to completion, Third $475.00 2.40 1,140,OD

Mortgagee and water bill arrears, and remaining items

to complete receivership administration; d/w Elie Khouriand his lawyer re: water bill arrears; d/w Baldwin Lawre: legal invoice for Wildwood Action; d/w John Williams

re: Oracle invoice; sign and return document to Beli to

transfer tel lines to Purchaser;

CRI AGT AGT80 General KLP 27!07/2017 D!w Vern Dane re: property tax statement recd from $475,00 0.30 142.50

City of Ottawa

CR) AGT AGT80 General KLP 28/07/2017 Review TCl operating account and arrange for account $475.00 0.70 332.50

closure and transfer of funds to HSBC trust account;d/w Elie Khouri re; distribution;

AGT Totals: 36.00 17,100.00

CRI REC REC07 Correspondence/E-mail MGG 1 7/0 712 0 1 7 Faxed motion of record and factum and brief of $200.00 0.10 20.00

authorities to CRA

CRI REC REG53 Banking MGG 10/07!2017 Cut cheque to Tomlinson, reconciled which $200.00 5.30 1,060.00.

disbursements posted to GL in June/July will be paid by

FL vs. Eli

CRI REC REC53 Banking MGG 11/0712017 Cut cheque to Tomlinson based on additional services $200.00 0.40 80.00

rendered (i.e. removal of garbage bins) which werenever included on original invoice

CRI REC REC53 Banking MGG 14/07/2017 Gave deposit from legalsettlement funds to Thomas to $200.00 0.20 40.00

deliver to bank

CRI REC REC62 Priority claims MGG 13/0712017 Reviewed ai bank statements from Feb. 2016 -April $200.00 0.80 160.00

2017 and reated schedule of all mortgage payments to

determine if CRA has a deemed trust priority claim

before 2rd mortgagee is paid out

CRI REC REC80 General MGG 0 410 712 0 1 7 Mailing out cheques to Colliers (commission) and $200.00 0.3p 60.00

Bobby (landscaping)

CRI REC REC80 General MGG 05/D7/2017 reconciling payroll per Jasmeet to payroll register $200.00 1.20 240.00

CRI REC REC80 General MGG 05107!2017 Cutting chequeslmailing them outto Best Linen, Van $200.00 3.10 620.00

Houtte, Sysco, Collins Barrow

CRI REC REC80 General MGG D6/07/2017 Reconciling payroll per Jasmeet to payroll register, $200.00 0.30 60.D0

emeiled Veeraje to confirm receipt of trust funtls

Fuller Landau LLP02 Aug, 2017 Page 6 of 6

Billing Worksheet

Primary Partner -Client CodeFilters Used:


Primary Partner: Heart, Ken (KLP)CRI REC REGBO General MGG 07/07!2017 Scanned June invoices for backup to send to purchaser $200.00 2.80 560.00

CRI REC REC80 General MGG 1 710 7/2 0 1 7 Prepared schedule of invoices from Jasmeet to assess X200.00 2.20 440.00

if she is owed money for personally paying for invoiceson credit card during receivership, created schedule ofmortgage payments and interest to compare againstCRA deemed trust calculation, dropped ofF cheque toreception for Wiidwood capital courier pickup

CRI REC REC80 General MLN 17/07/2017 Various banking $225.00 1.45 32625

CRI REC RECB(l General MGG 18/07/2017 Pro-rated WSIB calculation from April 7 -June 30, 2017 $200.00 1.70 340.00

and prepared WSIB letter

CRI REC REC80 General MLN 18!07/2017 Issue outstanding disbursements; emails $225.D0 1.90 427.50

CRI REC REC80 General MGG 19/07/2017 Reconciled journal entry on ADP report to vacation $200.00 0.1Q 20.00

accrual calculations

CRI REC RECB~ General MLN 21/07/2017 Pay final utility invoices $225.OD 0.70 157.50

CRI REC REC80 General MGG 24/07!2017 Reconciled June revenues and HST to bank deposits to $200.00 2.30 460.00

calculate net funds payable to purchaser

CRI REC RECB~ General MLN 24/0 712 0 1 7 Various banking; prepare request for interim payment $225.00. 2.90 652.50

to Elie Khouri; emails HSBC; pay outstandingdisbursements

CRI REC REC80 General MLN 25/07/2p17 Emaiis HSBC re: draft and pick up of draft; send $225.00 0.60 135.00

distribution to secured creditor

CRI REC REG80 General MlN 27/0712017 Calculate June HST; issue June HST payment; various $225.00 1.95 438.76

banking; emails

CRI REC REC80 General MLN 26J07/2D17 Emaiis confirming receipt of RFID draft; TD account; $225.00 1.35 303.75

deposit insurance refund; creditor query

REG Totals: 31.65 6,601.25

2177427 Ontario Limited 67,65 24,104.30

Employee SummaryGlowinsky, Michael (MGG) 20.80 4,160.00

Niva, Minna (MLN) 10.85 2,441.25

Pearl, Ken (KLP) 36.00 17,10D.00

Total Net Wip 67.65 23,701.25

WIP Progress Net WIP

Primary Partner Pearl, Ken Totals: $24,10 .30 50.00 $24,164.30

WIP Progress Net WIF'

Grand Totats: $24,1ii4.30 $OAQ $24,1Q4.30

T~ E ~U LLE R~°~ ~.P ~=_.p LANDAU G RC3U P~~,~

August 31, 2017

2'177427 Ontario Limitedc/o The Fu(ler Landau Group Inc.'[51 Bloor St. W. 12th FloorToronto, ON M5S 1 S4

Attention: Mr, Ken Pearl

Invoice No. 722572

Client Na. 9307379;01 KLP

INVOKE

TO P}20FESSIONAL SERVICES RENDEEiED:

With respect to our appointment as Court Appointed Receiver of 2177427 Ontario Ltd. for the periodending August 31, 2017 as set out in the attached detailed tame dockets.

OUR STANDARD FEE

K. Pearl - 24.70 hrs. @ $475.00/hr.M. Glowinsky - 27.60 hrs. @ $200.00/hr.M. Viva -17.25 hrs. @ $225.0 /hr.M. Baxter - 0.17 hrs. @ $125.00(hr.

Ourfee ....................................................................................................................... $ 21,155.00

Disbursements.......................................................................................................... '[40.15

Subtota ( ..................................................................................................................... 21, 295.15

HST ............................................................................................................................ 2,768.37

BALANCE IIUE ......................................................................................................... $ 24,063.52

Note:

Disbursements =Laurier charges

HST Registration No. 8130795669

Payment is due on receipt of account.Amount or~tstanding in excess at thirty days will be charged interest at 72% per annum untr! paid in fu(!.

Please remit to:THE FULLER LANDAU GROUP 1NC.

Accts Receivable

151 Bloor Street West,12th FloarToronto, OntarioCanada M5S 1S4 Toronto, Hamilton

Tei: (416) 645-6500Fax: (416) 645-6501

~w,nta.fu ilerflp. com

Fuller Landau LLP

OS Sep, 2017Billing Worksheet


- Time Expense Date: 1l1I2000 to 8/31/2017- Engagement Name: 2177427 Ontario Limited to 2177427 Ontario Limited

Primary Partner. Pearl, Ken {KLP)

Master Clienti: 13Q7379 - 2177427 Ontario Limited Retainer Balance WIP Progress Net WIP

1307379:01 -2177427 Ontario Limited - KL.P 0:00 21,295.15 0.00 21,295.15

rN~p Memo Rate Hours

-- Client -- Couriers BLIZZARD C 09/08/2017 Ship pate: July 25 $0.00

-- Client — Couriers BLIZZARD C 09108/2017 Ship Date: June 14 $4.44

Client — Couriers BLIZZARD C 09/OB/2017 Ship Date: June 27 $0.00

--- Client — Couriers BLIZZARD C 09/08/2017 Ship Date: July 4 $0.00

--- Client -- Couriers BLIZZARD C 09/08/2017 Ship Date: July 19 $0.00

--- Client -- Couriers FEDEX COU 1 010 8120 1 7 Ship Date: July 26 $0.00

--- Client — Couriers FEDEX COU 24/08/2017 Ship Date:August 3 $0.00

— Client — Couriers FEDEX COU 24108!2(117 Ship Date: August 11 $0.00

Client Totals:

CRI AGT AGT80 General KLP 31/07/2017 Email exchange with National Leasing and arrange for debtors $475.04 0.90

to sign lease transfer documents; d/w Veronique and review ofcommission invoices; confirm closure of TD bank account with



CRI AGT AGTSQ General

Greg McLaren; review invoice from Baldwin Law re: work onWildwood settlement;

KLP 01/08/2017 d/w Jasmeet re: reconciling June revenues to bank statement; $475.00 1.20

d/w Michael re: reconciliation of June revenues and expenses

to determine adjustment to Purchaser;

KLP 04/08/2017 d!w Michael Glowinsky re: invoices from National Leasing for ~A75.00 0.40

copiers leased to a different company; d/w John Williams re:

Rogers accounts far Internet and cable arrears;

KLP 09/08/2017 d/w Michael re: status of reconciling June results for $475.00 OJO

Purchaser's account, and emeils from HP re: unpaid invoices

for lease charges; flu with Jasmeet re: status of reconcilingJune revenues; f/u with Jeff Rosekat re: status of d!w CRA re:

HST arrears and his clients prescribed security interest;

Page 1 of 7

AR Balance0.00

Amount

3.30

13.86

3.30

3.30

13.86

36.69

32.92

32.92

140.15

427.50

570.00

190.00

332.50

Fuller Landau LLP05 Sep, 2017 Page 2 of 7

Billing Worksheet


- Time Expense Date: 1/1/2000 td 8/31/2017- Engagement Name: 2177427 Ontario Limited tp 2177427 Ontario Limited

Primary Partner: Pearl, iten (KLP)

GRI AGT AGT80 general KLP 10/08/2017 d/w Purchaser re: status of reconciling Adjustment for June $475.00 1.80 855.00operating profit; d/w Third Mortgagee re: consent to pay waterbill arrears and d/w Michael; d/w Kyryl and Michael Glowinskyre: demand for payment for o/s invoices due to Nutri Lawn ar~dAT&T; d/w Michael re: lease payments for copiers leased fromNational Leasing to related company; review status ofpayment of penalty on realty tax arrears;

CRI AGT AGT80 General KLP 11/08/2017 Review and update R&D and estimated funds available; $475.00 0:80 380.00

CRI AGT AGT80 General KLP 14/08/2017 d/w Michael Glowinsky re: confirming final invoices payable to $475.00 4.30 2,042.50

A7&T; prepare updated R&D, funds allocated for Juneoperations to Purchaser antl update estimated funds available

for Third Mortgagee; d/w Purchaser

CRI AGT AGT80 General KLp 15/08/2017 Review updated schedule of operating receipts/disbursements $475.00 2.10 997.50

for June and send to Purchaser; dlw Purchaser re: advanceon Adjustment for June; d/w Purchaser re: Roger's accounts;

CRI AGT AGT80 General KLP 17/08/2017 d/w collector for Nutri Lawn re: payment ofpre-receivership $475.00 0.70 332.50

invoices and send copy of receivership order; review of AT&Tinvoices and d/w Michael Giowinsky to request details ofinvoices for receivership period;

CRI AGT AG780 General KLP 18/08/2017 dtw Michael and Minna re: confirming invoices on Rogers $475.00 0.30 142.50email apply to receivership period;

CRI AG7 AGT80 General KLP 21lD8/2017 Update R&D and Estimated Funds available for distribution; $475.00 2.80 1,330.00

d!w Third Mortgagee re: approval for advance payment

CRI AGT AGT80 General KLP 22/OSI2017 Review legal invoice, dIw Vern Dane and request details of $475.00 1.10 522.50

hours and rates by timekeeper; dfw RFID re: sale of hotel and

new invoicing arrangements;

Fuiler Landau L.LP05 Sep, 2017 Page 3 of 7

Billing Worksheet


- Time Expense Date: 1/1/2000 to 8!3112017Engagement Name: 2177427 Ontario Limited to 2177427 Ontario Limited


CRI AGT AGT80 General KLP 24/08/2017 Review of AT&T and Rogers unpaid invoices during the $475.00. 0.60 285.00

receivership period and diw Minna;

CRI AG7 AGT80 General KLP 28!08/2017 Update R&D and funds available for distribution; $475.00 1.80 855.00

CRI AGT AGT80 General KLP 29/08/2D17 d/w CRA rep and Mike Merpaw of Collins Barrow re: $475.00 2.10 997.50

estimated royalties paid to ING and withholding tax arcears;d/w Vern Dane re: priority of claim;

CRf AGT AGT80 General KLP 30!08/2017 d/w Mike Merpaw of Collins Barrow and IHG re: royalties and $475.Op 2.40 1,140.00

withholding f~ payable and review CRA statements andschedules prepared by Collins Barrow for amounts payable

pre-receivership and since the receivership date; d!w MikeMerpaw re: retaining Collins Barrow to prepare NR4 returnssince 2014;

CRI AGT AGT80 General KLP 31/0B/2017 Review schedule of royalties paid during receivership and $475.00 0.70 332.50

withholding tax liabiliky and send to Mike Merpaw of CollinsBarrow to include in NR4 return;

AGT Totals: 24.70 11,782.50

CRI CBA CBA53 Banking MNB 10/0812017 June bank recs $125.00 0.17 21.25

CBA Totals: 0.17 21.25

CRI REC REC07 Correspondence/E-mail MGG 02/08/2017 Emailed KP about following up with Jasmeet re: reconciling $200.00 0.20 40.00

tleposits with revenues from summary listing, emailedJasmeet re: reconciliation of June deposits with revenue

.summary

CRI REC REC07 Correspondence/E-mail MGG 0 3 /0 8120 1 7 Sent Jasmeet email with May, June, and July 2017 bank $200.00 0.20 40.00

statements to reconcile June revenues

CRI REC REC07 Correspondence/E-mail MGG 08/08/2017 Prepared email to Rogers and John Williams re: cancelling $200.00 0.70 140.00

Rogers account and reminding John that we are notresponsible for any services rendered after June 3D, 2077

CR1 REC REC07 Correspondence/E-mail MGG 09/DS/2017 Emailed KP about status of HP o1s invoices from May and X200.00 1.20 240.00

July, sent email to John re: paying for pre-receivership HP

_ ._

lease payments and spoke to KP

Fuller Landau LLP

05 Sep, 2017 Page 4 of 7

Billing Worksheet


- Time Expense Date: 1/112000 to 8/31/2017- Engagement Name: 2177427 Ontario Limited to 2177427 Ontario Limited

Primary Partner: PearO, Ken (KLP)

CRI REC REC07 Correspondence/E-mail MGG 10/08/2017 Emailed Jasmaet re: National Leasing photocopiers leased to $200.00 0.50 100.00

2152746 Ont. Ltd. and to discuss June revenue reconciliation

GRI REC REC07 Correspondence/E-mail MGG 16/08/2017 Emailed Rogers to cancel cablelN account and inquire about $2D0.00 0.90 180.00

any o/s charges, emailed John Williams to update on

transfer/cancellation of Rogers accounts

CRI REC REC07 CorrespondencelE-mail MGG 17108!2017 Emailed John Williams re: AT&T unpaid bills for billing, wifi, $2D0.00 020 40.00

software protection services, etc.

CFtI REC REC13 Meetings MGG 1 0/0 812 0 1 7 Meeting with Ken over the phone to discuss water bill to pay $200.00 0.7p 1g0.OD

($53K), National Leasing photocopiers leased by 2152746

Ont., discussed with KP that Nutri-Lawn to send invoice so FL

can pay

CRI REC REC13 Meetings MGG 11/08/2017 Meeting with Jasmeet and KP to discuss June revenue $200.00 2.30 460.00

reconciliation, update schedule with June 5th bank credits to

reduce discrepancy of amount paid to the purchaser

CRI REC REC13 Meetings MGG 14/08/2017 Discussed receipts and disbursements, other details of Nutri- $200.00 2.10 420.00

lawn, water bill, other unsecured creditors

CRI REC REC1`3 Meetings MGG 16108/2017 Discussing Rogers bill with KP and Minna and what invoices $200,00 0.20 40.00

to pay for

CRI REC REC14 Telephone caIIsIV-mail MGG 03/08/2017 Spoke with Jasmeet re; reconciling June revenues to $200.OD 0.20 40.00

June/July deposits and removing May revenues from June

deposits

CRI REC REC14 Telephone callsN-mail MGG 09/08/2017 Spoke with Jasmeet re: June revenue reconciliation and $200.00 0.90 180.00

spoke with Hewlett Packard about o/s May and July invoices,

reconciled with Ascend GL

CRI REC REC14 Telephone caIIs/V-mail MGG 1o/08/2~17 Called and emailed Jasmeet to discuss about June revenue $200.00 D.40 80.00

reconciliation schedule and National leasing photocopiers

leased by 2152746 Ont., discussed with KP that Nutri-Lawn to

send invoice so FL can pay

GRI REC REC14 Telephone callsN-mail MGG 1 410 812 0 1 7 Spoke with Hollie from National Leasing re: transferring $200.00 0.40 80.00

2152746 Ont. Ltd. photocopiers to Williams Group, spoke with

Kyryl Koslov to send FL invoices for AT&Y, called Nutri-lawn

to explain how their invoice from October 2016 is an

unsecured claim

CRI REC REC14 Telephone ceiisN-mail MGG 1 510 6/2 0 7 7 Called Rogers and inquired about cancelling cable "I'V X200.00 0,40 80.00

account, left voicemail, spoke with several representatives

Fuller Landau LLP05 Sep, 2017 Page 5 of 7

Billing Worksheet

Primary Partner- Glient CodeFilters Used:

- Time Expense Date: 1!1/ZQDO to 8!31!2017- Engagement Name: 2177427 Ontario Limited to 2177427 Ontario Limited


CRI REC REC14 Telephone callsN-mail MGG 16/08/2017 Called Rogers and inquired about cancelling cable N $200.Op 0.40 80.00account, left voicemail, spoke with representative which emailaddress to write to in order to cancel account

CRI REC REC14 Telephone cailslV-mail MGG 29/08/2017 Call with KP to discuss withholding taxes GRA is requesting $200.00 0.20 40.00from Bobby ($140K), spoke with Kyryl re: A7&T mailingaddress

CRI REC REC80 General MLN 01/OBl2017 Call from Best Linea re: status; confirm TD wire; cretlitor $225.00 2:45 551.25query; file ail outstanding RT0002 HST returns to June 30

CRf REC C2EC80 General MGG D2/08/2017 F2eviewing spreadsheet from Jasmeet showing a June cash $200.00 0.80 160.00flow, not a reconciliation between bank deposits and revenuesfrom the listings

CRI REC REC80 General MLN 02/08/2017 Issue payment to Baldwin Law; emai~s re: lease assignment $225.00 1.95 438.75form; various banking

CRI REC REC80 General MGG p8/~8/2017 Called Rogers and spoke with Christian about unpaid bill $200.00 0,60 12D.00dated July 28, 2017 which remains outstanding, updated

Ken/Minna about status of unpaid bill, emailed Ken re:National Leasing contact info, for Hoilie, reviewed Junerevenue reconciliation schedule. provided by Jasmeet

GRI REC REC80 General MGG 10/08/2017 Reviewing GL to assess if city of Ottawa realty taxes were $200.00 0.60 120.00paid

CRI REC REC80 General MGG 11/08/2017 Cut cheque and mailed via courier tp City of Ottawa for $20Q.D0 0..30 60.00penalty on realty taxes

GRI REC REC80 General MGG 14I08l2017 Reviewing detail of unpaid bills from A7&T and emailing Ken $200.00 3.20 640.D0

about the same, updated receipts and disbursementsreconciliation schedule and discussed with KP how much todistribute to purchaserlholdback certain amount based ontransactions that occurred after July 24, 2017, retrievingbackup for all invoices which prove why FL is holding backcertain funds from purchaser! reducing payment to purchaser

due to cut-off issues

CRI REC REC80 General MGG 1 510 8/20 1 7 Prepared summary of TD operating and HSBC trust account $200.00 7.80 1,560.00June expenses which were paid on behalf of purchaser by FL,scanned all relevant invoices, cheques and other pertinentinformation for backup, followed up with A7&7 and inquirednature of services rendered

CRI REC REC80 General MLN 15/08!2017 Pay outstanding disbursements; various banking; request .$225.00 2.10 4'i'L.SU

draft for purchaser

Fuller Landau LLP

OS Sep, 2017Billing Worksheet


- Time Expense Date: 1/1/2000 to 8/31/2017Engagement Name: 2177427 Ontario Limited to 2177427 Ontario Limited

primary Partner: Psarl, Ken (KLPj

CRI REC REC80 General MGG 16/08!2017 Updated summary of amounts payable to purchaser with KP, $200.00

removed HS7 component for simplicity since it ail expenses

paid on behalf of purchaser were already included in summary

CRI REC REC80 General MGG

CRI REC REC80 General MLN


CRI REC RECB~ General MLN


CRI REC REC80 General MI.N








report

17/08/2017 Prepared schedule for John Williams re: AT&T unpaid bills for $2DD.00

billing, wifi, software protection services, etc.

17/08/2017 Various banking; RT0002 ~~25.00

1 810 81201 7 Further review of Rogers cable and Internet accounts; emails $225.00

to Rogers to resolve same

21/08/2017 Emails re; Rogers cable service, modem; discussion with X225.00

Kyryi; variousbanking

22/08!2017 Reconciling which AT&T invoices FL should pay for from April $200.007 -June 30. Invoices are broken dawn into two services -oneof which is billed in subsequent billing period and the otherbilled in the same billing period. Emailed AT&T to request for

July billing period invoice to pay for June services rendered

and spoke with KP about how much to cut cheque for, printedbackup for review

22/08/2017 Email Rogers re: Internet, confirmation of returned equipment; $225.00payment outstanding disbursements; request 2nd distribution

to EKhouri

23/08/2017 EKhouri second distribution $225.00

24/08/2017 Obtain prior Internet invoices to determine final amount owed; $225.00

emails to Rogers; various banking; creditor query

28/08/2D17 Cut cheque to AT&T and .provided backup to KP $200.00

29/08/2017 Emailed Zuzans from ATB~T re: mailing address to send $200:00

cheque to

29/08/2017 Payment outstanding invoices; review IMG royalty payments $225.00

re: withholding tax; various banking

3 0 /0 8120 1 7 Emailed Zuzana from AT&T re; mailing address to send $200AC

cheque to. Zuzana sent us email address, not mailing address

31/08/2017 Prepare royalties/withholding taxApril to June schedule; ~225.00

various banking

REC Totals:

0.30

Q.60

1.45

0.90

1.25

0.90

2.75

0.45

7.50

0.20

0.10

1.55

0.10

0.9~

44.85

so.00

Page 6 of 7

120.00

326.25

202.50

281.25

180.00

618,75

10125

337,50

40.00

20.OD

348.75

20.00

202.50

9,4Q1.25

Fuller Landau LLP05 Sep, 2017

Billing Worksheet


- Time Expense Date: 1!1/2000 to 8/31/2017Engagement Name: 2177427 Ontario Limited to 2177427 Ontario Limited

Primary Partner: Peeei, Ken (lCLP)


Employee SummaryBaxter, Monique (MNB)Glowinsky, Michael (MGG)Niva, Minna (MLN)Pearl, Ken (KLP)

7ota1 Net Wip

Primary Partner Pearl, Kerr Totals:

Grand Totals:

WIP

$21,295.15

WIP

521,295.15

69.72

0.17

27.6017.2524.70

69.72

Progress

$0.00

Progress

sn.nn

21,295.15

21.25

5, 520, 0 D3,881.25

11, 732.50

21,155.00

Page 7 of 7

Net WIP

$21,295.15

Net WIP

$21,295:15

s ~ ~

~,.

SepfemBer 30, 217

2177427 Ontario Limitedc(o The Fuller Landau Graup (nc.159 Bloor St. W. 12#h FlaarToronto, ON M5S 1 S4

Attention: Mr. Ken Pearl

~tivoicE

Invoice No. 722919

Client No. 9307379:01 KLP

TO PROFESSIONAL SERVICES RENDERED:

'vVi#h respect to our appointment as Court Appointed Receiver of2177427 Ontario Ltd. for the periodending September 30, 20~ 7 as set out in the attached detailed time dockets.

OUR STANDARD FEE

K. Pearl - 7.30 hrs. @ $475.00/hr.M. Niva - 9.90 hrs. @ $225.00/hr,M. Baxter - 0.77 hrs. @ $125.00/hr.

Ourfee ....................................................................................................................... $ 5,716.25

Disbursements.......................................................................................................... 57.99

Subtotal..................................................................................................................... 5, 77424

.HST ............................................................................................................................ 750.65

BALANCE DUE :........................................................................................................ $ 6,524.89

Note:

Disbursements =Courier charges

~-iST Registration No. 8130795669

Payment is due on receipt of account.Amount outstanding in excess of thirfy days wF/1 be charged interest at 12% per annum until paid in full,

Please remit to:THE FULLER LANDAU GROUP INC.Accts Receivable15 T Bloor Street West,12th FloorToronto, OntarioCanada fUI5S 1S4 Toronto, Harnilion

Tel: (416) 645-6500Fax: (496) 645-6501

~w,nN.fullerl Ip. com

- ,n_. ~_-

2177427 Ontario LimitedSeptember 3a, 2017 Page 2

Client No. 9307379:09 KLP Invoice No. 122999 lnvoiceAmt. $6,524,89 'I

. ~, ~ ..

Cardholders Name:

-t

Credit Card Type: ❑ Visa ❑ Mastercard CVD:

Credit Card Number: Ex iration Dafe:

Si nature: Date:

Ptease remit to:T~iE FULLER LANDAU GROUP INC.Accts Receivable1~1 BloorStreet West,l2th FloorToronfo, OntarioCanada M5S 1S4 Toronfo, Hamilton

Tef: {416) 645-6500Fax: (416}-645-6501

v+nwv.fullerElp.com

Fuller Landau LLP02 dct, 2017 Page 1 of 2

Billing Worksheet




Master Client: 1307379 - 2177427 Ontario Limited Retainer Balance WIP Progress Net WIP AR Balance

~3p7s~s:o~ - 2177427 Ontario Limited - KLP 0.00 5,774.24 0.00 5,774.24 0.00

WIP Memo Rate Hours Amount

--- Client --- Couriers FEbEX COURIER 06/09/2017 Ship Date: August 17 $0.00 27.06

-- Client --- Couriers FEDEX COURIER 06/09/2017 Ship Date: August 23 $0.00 27.63

--- Glient -- Couriers BLIZZARD COURIEI 1 310 9/20 1 7 Ship Date; August 23 $0.00 3.30

Client Totals: 57.99

CRI AGT AGT80 General KLP g1/09/2017 D/w Vern QaRe re: responding to inquiry he received X475.00 0.30 142.S0

from equipment lessor;

CRI AG7 AGTeo General KLP 05/09/2017 Update R&D and funds available for distribution and $475.OD 2:30 1,092.50

d/w third mortgagee; request and review statementfrom IHG re: deduction from royalties for 10%withholding taxes;

CRI AG7 AG780 General KLP 06/09/2017 Review of email from and d/w Mike Merpaw ra: NR4 $475.00 1.90 902.50

returns and withholding tax liability for royalties paid toIHG and confirm schedule of amounts owing duringreceivership period w/Minna; d/w collector for Rogersre: o/s amounts;

CRI AGT AGT80 General KLP 11/D9/2017 D/w front desk manager re: approval of June invoices $475.00 0.40 190.D0

for plumbing and dry cleaning just recd;

CRI AGT AGT80 General KLP 15/09/2D17 D/w Minna re: confirming o!s amount due for water $475.00 0.40 190.00

arrears with City of Ottawa;

CRI AGT AGT80 General KLP 18/09/2017 DJw Kyryl re: approval of operating invoice during $475.00 0.30 142.50

receivership period

CRI AGT AGTBo General KLP 20/0912017 D!w purchaser re: status of settling holdback for June $475.00 b.60 285.00

operating profits; dlw Collins Barrow re: status of

completion of NR4 returns;

CRI AGT AGT80 General KLP 21/092017 Review o/s ADP and Globe and Mail charges during $475.00 0.40 190.00

receivership period and d/w Kyryl Koziov; requestcopies of invoices from Globe;

CRI AGT AGT80 General KLP 29/09!2017 D/w Minna and John Williams re: AT&T invoices recd $475.00 0.70 332.50

during receivership period; d/w Collins Barrow re: NRAreturns

AGT Totals: 7.30 3,467.50

Fuller Landau lLP02 Oct, 2Q17

Billing Worksheet

Primary Partner - Client CndeFilters Used:

- Time Expense Date: 2000-09-01 to 2017-09-30Engagement Name: 2177427 Ontario Limited to 2'177427 Ontario Limited

Primary Partner: Purl; Ken (KLP)

CRI CBA CBA53 Banking MNB 72/09/2017 July bank recs $125.00

CBA Totals:

CRI REC REC80 General MLN 0 1 /09120 1 7 Rogers cable foilowup re: smell add'I balance

CRI REC REC80 General MLN 05!09/2017 Review additional outstanding invoices; Jasmeet email

GRI REC RECBO General MLN 06109!2017 Review royalties; call to CCC re: Rogers

CRI REC RGC80 General MLN 08109!2017 Payment outstanding invoices

CRI REC REC80 General MLN 11/9/2017 Pay outstanding disbursements; catl to TSSA todetermine if any amount is owing

CRI REC REC80 General MLN 14/09/2017 Review TSSA outstanding invoices; email to Kyryl totransfer to purchaser

CRI REC RECBO General MLN 15/09/2017 Emails re: amount owing re: water accounts; paymentof TSSA June invoices; pay additional outstandingdisbursement

CRI REC RECBO General MLN 1 8109/20 1 7 Email to TSSA; payment Aenos purchase invoice

CRI REC REC80 General MAN 21/D9/2017 Pay Globe and Mail; f/up emaiis re: City of Ottawawater acct; Jasmeet emails

CRI REC REC8D General MLN 25/09/2017 ,lasmeet emails; review Hewlett Packard outstandinginvoices

CRI REC REC80 General MLN 29/09/2D17 Review A7&T, Hewlett-Packard and City of Ottawaoutstanding amounts; various emails

REG Totals:


EmployeeSummaryBaxter, Monique (MNB)

Niva, Minna (MLN)Pearl, Ken (KLP}

Total Net Wip

$225.D0

$225.00

$225.00

$225.00

$225.00

$225.OD

$225.00

$225.00

$226.00

$225.00

5225.00

WIP

Primary Partner P88CI, Ken Totals: 3s,r7az~

WIP

Grand Totals: $5,774.24

Page 2 of 2

0.17 2125

0.17 21.25

0.45 101.25

0.6p 135.00

1.10 247.50

D.70 157.50

1.25 261.25

0.75 168.75

1.30 292.50

Q.60 135.00

1.25 281.25

0.60 1.35.00

1.30 292.50

9.90 2,227.Sp

17.37 3,774.24

0.17 21.25

9.90 2,227.507.30 3,467.50

77.37 5,716,25

Progress NetWIP

So.od $s,~7~za

Progress Ne4WIP

$0.00 $5,774.24


ONTARIOSUPERIOR COURT OF JUSTICE(COMMERCIAL LIST)

BETWEEN:


Applicant

-and-


Respondent

AFFIDAVIT OF JARED SCHWARTZSWORN OCTOBER 27, 2017

I, Jared Schwartz, of the City of Toronto, Province of Ontario, Barrister and

Solicitor, MAKE OATH AND SAY AS FOLLOWS:

1. I am a lawyer with the law firm of Fogler, Rubinoff LLP ("FR") and have

knowledge of the matters hereinafter deposed to.

2. Attached hereto as Exhibit "A" is a true copy of the interim account dated July 21,

2017, rendered from the period of June 16, 2017 to July 21, 2017 by FR to The

Fuller Landau Group Inc., in its capacity as Receiver of the Respondent (the

"Receiver"), which account sets out the particulars of the work performed by FR

with respect to this matter.

3. The total of the interim fees, disbursements and applicable taxes from June 16,

2017 to July 21, 2017 is the sum of $44,635.36. The said account by FR to the

Receiver is summarized as follows:

Date Fees Disbursements HST Total

July 21, 2017 $ 37,571.50 $ 1,965.62 $ x,098.24 $ 44,635.36

4. The following are the billing rates of the lawyers who have worked upon the

matter together with their year of call.

Timekeeper Hourly Rate Year of Call

Vern W. Dane 530.00 1991

5. The hourly billing rates applied are FR's normal hourly rates for this client.

SWORN before me at the City of)Toronto, in the Province of Ontario, this)27t'' day of October, 2017. )

.̀ ~ -~CJ~1(V~J~.P1.1L~

A Commissioner, etc.

Sabrina Sarrto~anni, a Commissioner, etc.C~?y of Tororta, for Fogier, Rubinof(LLP~

E '~''?`°z5 2f:d SO~ICIrO(5.

G.r:: as Cecember 12, 2D17.

~~ y~ w.____.___~

~,.--"•

J2T' , C W2TtZ

r

This is Exhibit "A" referred to in the Affidavit of Jared Schwartz sworn

before me this 27th day of October, 2017

A Commissioner for taking affidavits, etc.

Sabtitrd $antoianni, a Cotrnnissionef. etC.City of Toronto, for Fogler, Rubinoff LLP~Barristers znd 5o!ic ;ors.E;:,.'.~~s December 12, 2017.

July 21, 2017

The Fulier Landau Group Inc.151 Blaor Street Nest12th FloorToronto ONMSS IS4Attention: Ken Peaxt

TN ACCOUNT WtTT-IFogter, Rubinoff LLP

77 King Street West, Suite 3000TD Centre North Tower

P.O. Box 95Toronto, ON

M5K 1 G8Tetephone:416-864-9700

Fax: 416-941-8852www.fogfers.com

i ~ ~'.,~

_ ~

Our File: F2057 / 1722902177427 Ontario Limited, Receivership of

Date Lawyer Description I-Irs

Jun-16-17 VSF Commercial motion- factum- briefs. 0.60Jun-26-17 DM print and review all emails with client and purchaser's solicitor, 2.7Q

draft undertakings, scan and email Vesting Order Application topurchaser's solicjtor.

Jun-26-17 VWD Review payout statements of Romspen and HarbourEdge; read 2.20emails from client; emails to and fi•om Purchaser's lawyer, BillKing; deal with closing matters.

Jun-26-17 VWD Telephone conversation with Doug McMullen of our office; review 1.30the draft statement of adjus~nent, direction and Application forVesting Order; emails to and from client and Bill King regardingclosing.

Jnn-27-17 DM review emails re June 1st closing, amend statement of adjustments, 2.70amend application to show new corporate purchaser, amend client'sundertaking, message application to purchaser's solicitor in escrow,review closing agenda, scan and email draft documents topurchaser's solicitor.

Jun-27-17 VWD Review and propose revisions to the draft Third Report of the 1.50Receiver; email to client regarding same.

Jun-27-17 VWD Review, revise and complete Motion Record, Factum and Brief of 2.50Authorities for Motion returnable July 7, 2017 (settlement ofWildwood Action); emails to and from client regarding same.

Jun-27-17 VWD Review Purchaser's lawyer comments regarding d~~aft and revised 1.60CIosing Agenda; reply to same; telephone conversation with clientand Doug McMullen of our office regarding same.

Jun-28-17 DM continued stream of emails and telephone conversations back and 1.64forth.

fog ~~ ~Date Lawyer Description I~rs

Jun-28-17 VWD Review Ciasing documents prepared by Purchaser's lawyer for sale 4.20of Hotet; telephone conversations and email exchanges with clientand Doug McMullen of our office; email exchanges with TimDwyer of HarbourEdge regarding pay out of first and secondmortgages; research Iaw and relevant sections of the Municipal Actdealing with the treatment and priority status of water arrear claimsin a receivership; review water bill and email demand far paymentof water arrears by City of Ottawa; email to client regarding same.

Jun-28-17 VWD Review emails from Tim Dwyer at HarbourEdge regarding payout 0.40of mortgages and closing; reply to emails; telephone conversationwith client regarding same.

Jun-29-17 DM review various emails from and to all parties, attend on client to sign 1.60closing documents, escrow letter to purchaser's solicitor, scan andemail closing documents to purchaser's solicitor.

Jun-29-17 VSF Commercial motion. 0.60Jun-29-17 VWD Review Matian Record of Wildwood Capital Inc. regarding Jui}~ 7 0.30

motion.Jun-29-17 V WD Review and revise closing documents for tomorrow's closing sale of 5.70

the Hotel; several emails from and to Purchaser's lawyer regardingdraft closing documents; emails to and from client regarding same;meeting with client to sign closing documents; emails to GregParker and David Downs regarding Wildwood Settlement and the3uly 7 Motion; telephone conversation with client regarding same.

Jun-30-17 DM review several emails re closing documents and funds, complete l 20Order, scan and input into Application, receive funds, releaseApplication from escrow, advised closed, process funds, wire anddirect deposit, pay outstanding realty taxes, letter to City of Ottawasending tax arreaxs money, pay out 2 mortgage holders as per CourtOrder as required.

Jun-30-17 VWD Review letter from Christopher Moare, counsel for HTG 0.30Management Group Inc.; reply to same; email to client regardingthe letter.

Jun-30-17 VWD Preparation and deal with several issues to close today's sale of 4.30Hotel including review, revision and finalization of closingdocuments; several emaits from and to Purchaser`s lawyer regardingclosing; several emails from and to client regarding closing.

Jul-04-17 DM email Cindy/Ruth re interest on deposit funds, 3•eceive interest 0.70amount, requisition cheque, letter to purchaser's solicitor withinterest cheque.

Jul-04-17 VWD Review emails from Ken Pearl and Greg Parker regarding closing; 0.50telephone conversation with Greg Parker; review emaiis fromDavid Downs.

Jul-d4-17 VWD Review Statement of Account for June 30, 2017 regarding money 2.20paid into Court in the Wildwood action; email exchanges withDavid Downs and Greg Parker regarding same; review package ofsigned closing documents received today from Purchaser's lawyerregarding sale of Hotel; telephone conversation with DougMcMullen regarding interest payment to Purchaser.

Jul-OS-17 VWD E-mails to and from client regarding closing funds and Wildwood 0,30settlement.

Page 2 of 5

foggy ~~ ~Date Lawyer Description Hrs

Jul-06-17 VWD Preparation for tomorrow's Motion-by reviewing our Motion 3.20Record including Third Report of Receiver, Factum and Brief ofAuthorities and draft Orders; discuss same with client; emails tocounsel for Debtor and Wildwood Capital regarding same; dealwith post-closing sale matters.

Jul-07-17 VWD Attend on today's motion before Justice Hainey regarding 2,70settlement of Wildwood Action; prepare by reviewing our MotionRecord, Factum and Brief of Authorities; review Wildwood'sMotion Record; report to client on outcome.

3u1-10-17 VWD Review issued and entered Orders regarding the Wildwood Action; 1.60review and amend the Request form to have money paid out of courtregarding the Wildwood Action; letter to the Accountant of theSuper€or Court of Justice requesting to have money paid out of courtin favour of the Receiver.

Jul-10-17 VWD Preparation for July 21 Motion: the Motion Record including 2.40Notice of Motion, draft Order and research and print case law insupport of Motion.

Jul-11-17 VWD Review the draft summary of Estimated Funds Available for 4.20distribution prepared by the Receiver; prepare first draft of Factumfor July 21 motion; review, update and highlight case law to beinctuded in the Receiver's Brief of Authorities iri support of the July21 motion; email exchanges with client.

JuI-I 1-17 VWD Telephone call from Accountant of Superior Court of Justice 0.30confirming that cheque is ready regarding Security Funds held byCourt in the Wildwood Action and that it will be delivered to theReceiver; email to client and lawyers for Plaintiff and Defendants inthe Wildwood Action confirming same.

Jul-12-17 VWD Review, revise and finalize for July 21 Motion, the Motion Record 4.20including notice of motion, draft Order, Factum and Brief ofAuthorities; telephone conversation and email exchanges withclient.

Jul-12-17 V'WD Review and propose revisions to draft Fourth Report of the 1..30Receiver; email to client regarding same.

Jul-12-17 VWD Review and reply to email from David Downs regarding Security 0.10Funds.

Jul-13-17 VWD Review second draft of Receiver's Fourth Report and comment on 1.20same; email to client.

Jul-13-17 VWD Telephone conversations with Ken Pearl regarding telephone call lie 0.50received today from CRA regarding the deemed trust claim.

Jul-I3-17 VWD Review Urgent Letter from CRA regarding deemed trust claim. U.20Jul-13-17 VWD Review tax Regulation dealing with the calculation ofthe amount of 1.80

the prescribed security interest; consider any case law andcommentary on the calculation of the amount of the prescribedsecurity interest under the Excise Tax Act; email to clientsummarizing same.

Page 3 of 5

fag~~ c~Date Lawyer Description

Jul-14-17 VWD Research and review case law and commentary dealing with CRA'sdeemed trust under the Excise TaY Act and the Regulation dealingwith "prescribed security interest' ;revise draft Factum and Brief ofAuthority to deal with CRA's deemed trust claim; review andpropose revisions to the draft Fourth Report of the Receiver deali~igwith CRA's deemed trust claim.

3u1-17-17 VWD Telephone conversation with Ken Pearl regarding CRAs deemedtrust claim; telephone conversation with Jeff Rosekat, lawyer forthird mortgagee regarding CRAB deemed trust claim; review ema.ilsfrom Receiver and David Dawns regarding settlement cheque inWildwood Action.

Jul-18-17 VWD Review email from client regarding priority position of the water•arrears claim in relation to the mortgagee; review emails from Iocalboard regarding same; research case law to confirm whether waterarrears has to be added to the tax roll before the special lien arises;emails to client regarding same.

Jul-19-17 VWD Telephone conversation with Ken Pearl; review Notice ofAppearance and letter from CRA; emails to and from Ken Pearlregarding same.

Jul-2Q-17 VWD Preparation for tomorrow's motion by reviewing Motion Recordincluding notice of motion, Second Report of Receiver, draft Order,Factum and Brief of Authorities; revise draft Order; emails to andfrom client.

Jul-21-17 VWD Review Motion Record, Factum and Brief of Authorities inpreparation of today's motion; attend before Justice Conway andobtain Order; emails to and from client regarding same.

OUR FEE HEREIN

Disbursements

Taxable Binding Supplies $138.10

Taxable Certification of Cheque/Bank Charges $20.00

Taxable Courier & Delivery $137.29

Taxable Faxes $16.15

Exempt File Notice of Motion/Application $320.00

Taxable Postage/Registered Maii $2.58

Taxable Prints $1,042.50

Taxable RealtiWeb -Web Usage Fee $20.00

Taxable Scanning $219.00

Ta~cable Wired Funds Charge $50.00

Total Disbursements

Total Fees and Disbursements

HST @ 13% on Fees and Taxable Disbursements

Hrs

4.60

0.50

I.20

0.50

3.20

330

$37,571.50

$1,965.62

$39,537.12

$5,098.24

Page 4 of 5

foggy ur~ir~c~~

Total Fees, Disbursements and Taxes this Bill $44,635.36

Balance Due: $44,635.3b

THIS IS OUR ACCOUNT HEREINFOULER, RUBINOFF LLP

S :; .'':

V ~3 i 'j

Vern . Dai •~~''-

THIS ACCOUNT BEARS INTEREST, CODifMENCING ONE MONTH AFTERDELIVERY, AT THE RATE OF 330% PER ANNUM AS AUTHORIZED BYTHE SOLICITORS' ACT. ANY DISBC7RSEMENTS NOT POSTED TO YOURACCOUNT ON THE DATE OF THIS STATEMENT WILL BE BILLEDLATER.

E. & O.E. GSTlHST No : R119420854Please relurtt a cope of this occount with your payment. Thank you.

For your convenience, we have the following payment options:

• Online banking using the Bill Payment Service at most Canadian chartered banks.. Pleasereference your file or account number in the notes box.

• Direct Deposits at a TD Branch (please provide your Fogler, Rubinoff lawyer with a copy of thecheque and deposit receipt).

• Wire transfer {please reference your file or account number).

• Electronic Funds Transfer (EFT).

• Cheque by mail or courier.

Should you require assistance, please contact onr Accounts Receivable Department at 416.864.9740 x152or by e-mail accountsrecevabCe ~r fog;lers.com.

Page 5 of 5



COMMERCIAL LIST

THE HONOURABLE ) TUESDAY, THE 14tH

JUSTICE ~ DAY OF NOVEMBER, 2017

BETWEEN:


Applicant

~~:~


Respondent

DISCHARGE ORDER

THIS MOTION, made by The Fuller Landau Group Inc., in its capacity as the Court-

appointed receiver (the "Receiver") of the undertaking, property and assets of the Respondent

(the "Debtor"), for an order:

1. i approving the activities of the Receiver as set out in the report of the Receiver dated

November 1, 2017 (the "Fifth Report");i

2. approving the fees and disbursements of the Receiver and its counsel;

DOCSTOR: 1201925\8

~~

3. approving the payment and final distribution of the remaining proceeds available in the

estate of the Debtor;

4. approving the holdback and reserve of funds to complete the administration of the

receivership;

5. discharging The Fuller Landau Group Inc. as Receiver of the undertaking, property and

assets of the Debtor; and

6. releasing The Fuller Landau Group Inc. from any and all liability as set out below in this

Order,

was heard this day at 330 University Avenue, 8th Floor, Toronto, Ontario.

ON READING the Fifth Report, the affidavits of the Receiver and its counsel as to fees

(the "Fee Affidavits"), and on hearing the submissions of counsel for the Receiver, and any other

person appearing from the service list, as properly served as evidenced by the Affidavit of

Michelle Pham sworn November 2, 2017, filed;

1. THIS COURT ORDERS that the activities of the Receiver, as set out in the Fifth Report,

are hereby approved.

2. THIS COURT ORDERS that the fees and disbursements of the Receiver and its counsel,

as set out in the Fifth Report and the Fee Affidavits, are hereby approved.

3. THIS COURT ORDERS that the Receiver shall make certain payments and Holdback for

the HST Deemed Trust and shall reserve funds including for the estimated professional fees and

disbursements of the Receiver and its counsel to complete the administration of the receivership,

as described and in the amounts set out in the Fifth Report.

4. THIS COURT ORDERS that, subject to paragraph 3 of this Order, the Receiver shall pay

the monies remaining in its possession available for distribution, as estimated in the Fifth Report,

to Elie Khouri.

5. THIS COURT ORDERS that upon the Receiver filing a certificate of completion with

this Court certifying that it has completed the activities described in the Fifth Report, the

Receiver shall be discharged as Receiver of the undertaking, property and assets of the Debtor,

DOCSTOR: 1201925\8

-3-

provided however that notwithstanding its discharge herein (a) the Receiver shall remain

Receiver for the performance of such incidental duties as may be required to complete the

administration of the receivership herein, and (b) the Receiver shall continue to have the benefit

of the provisions of all Orders made in this proceeding, including all approvals, protections and

stays of proceedings in favour of The Fuller Landau Group Inc. in its capacity as Receiver.

6. THIS COURT ORDERS AND DECLARES that The Fuller Landau Group Inc. is hereby

released and discharged from any and all liability that The Fuller Landau Group Inc. now has or

may hereafter have by reason of, or in any way arising out of, the acts or omissions of The Fuller

Landau Group Inc. while acting in its capacity as Receiver herein up to and including the

discharge date as described in any of its reports to the Court, save and except for any gross

negligence or wilful misconduct on the Receiver's part. Without limiting the generality of the

foregoing, The Fuller Landau Group Inc. is hereby forever released and discharged from any and

all liability relating to matters that were raised, or which could have been raised, in the within

receivership proceedings, save and except for any gross negligence or wilful misconduct on the

Receiver's part.

DOCSTOR: 1201925\8



COMMERCIAL LIST

THE HONOURABLE

JUSTICE

TUESDAY, THE 14tH

~ DAY OF NOVEMBER, X82017

BETWEEN:


Applicant

- and --


Respondent

DISCHARGE ORDER

THIS MOTION, made by {}The Fuller Landau Group Inc.. in its capacity as the

Court-appointed receiver (the "Receiver") of the undertaking, property and assets of {}the

Rest~ondent (the "Debtor"), for an order:

DOCSTOR: 1201925\8

2

approving the activities of the Receiver as set out in the report of the Receiver dated

{November 1, 2017 (the "Fifth Report");

2. approving the fees and disbursements of the Receiver and its counsel;

3. approving the avment and final distribution of the remaining proceeds available in the

estate of the Debtor;}

4. abprovin~ the holdback and reserve of funds to comblete the administration of the

receivershit~;

5. 4—discharging {}The Fuller Landau Groun Inc. as Receiver of the undertaking, property

and assets of the Debtor{; and

6. ~-releasing {}The Fuller Landau Groun Inc. from any and all liability, as set out below in

~'~ ~ ̂ ~ this Order},

was heard this day at 330 University Avenue, 8th Floor, Toronto, Ontario.

ON READING the Fifth Report, the affidavits of the Receiver and its counsel as to fees

(the "Fee Affidavits"), and on hearing the submissions of counsel for the Receiver, ~~and

anv other person appearing ~~~e~gkfrom the service list, as nronerly served as evidenced by the

Affidavit of {}Michelle Pham sworn {}November 2, 2017, filed;

~-1. THIS COURT ORDERS that the activities of the Receiver, as set out in the Fifth Report, are

hereby approved.

~2. THIS COURT ORDERS that the fees and disbursements of the Receiver and its counsel, as

set out in the Fifth Report and the Fee Affidavits, are hereby approved.

3. THIS COURT ORDERS that the Receiver shall make certain navments and Holdback for

the HST Deemed Trust and shall reserve funds including for the estimated professional fees and

disbursements of the Receiver and its counsel to comalete the administration of the receivership,

as described and in the amounts set out in the Fifth Reaort.

DOCSTOR: 1201925\8

3

~-4. THIS COURT ORDERS that, subiect to uara~raph 3 of this Order. the Receiver shall nav the

monies remaining in its possession available for distribution, as estimated in the Fifth Report. to

Elie Khouri.

4.-5. THIS COURT ORDERS that upon r~~~~^~~+ ,.~+~,o ., r,-~ ~o+ ,,,,+ ;,, r r~, ~ ~.o,.~,.~ r.,r,a

rthe Receiver filing a certificate of completion with this Court certifying that it has completed

the s#~e~activities described in the Fifth Report}, the Receiver shall be discharged as Receiver of

the undertaking, property and assets of the Debtor, provided however that notwithstanding its

discharge herein (a) the Receiver shall remain Receiver for the performance of such incidental

duties as may be required to complete the administration of the receivership herein, and (b) the

Receiver shall continue to have the benefit of the provisions of all Orders made in this proceeding,

including all approvals, protections and stays of proceedings in favour of {}The Fuller Landau

Crroun Inc. in its capacity as Receiver.

--~6̀ THIS COURT ORDERS AND DECLARES that {}The Fuller Landau Groub Inc. is

hereby released and discharged from any and all liability that {}The Fuller Landau Grouts Inc. now

has or may hereafter have by reason of, or in any way arising out of, the acts or omissions of {}The

Fuller Landau Group Inc. while acting in its capacity as Receiver herein u to and including the

discharge date as described in anv of its reborts to the Court, save and except for any gross

negligence or wilful misconduct on the Receiver's part. Without limiting the generality of the

foregoing, {}The Fuller Landau Group Inc. is hereby forever released and discharged from any and

all liability relating to matters that were raised, or which could have been raised, in the within

receivership proceedings, save and except for any gross negligence or wilful misconduct on the

Receiver's part.}

DOCSTOR: 1201925\8

HARBOUREDGE MORTGAGE INVESTMENT CORPORATION -and - 2177427 ONTARIO LIMITED

Applicant Respondent



(COMMERCIAL LIST}

Proceedings commenced at Toronto

MOTION RECORD

FOGLER, RUBINOFF LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD CentreToronto, Ontario M5K 1 G8

Vern W. Dane (LSUC# 32591 E)Tel: 416-941-8842Fax: 416-941-8852

Lawyers for The Fuller Landau GroupI nc., in its capacity as court appointedreceiver of the property of theRespondent

motion record (returnable november 14,...

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