Creditor protection extended for insolvent landlords who own dozens of Sault houses

The group of now-insolvent out-of-town landlords affiliated with SID Developments has been granted an extension of its court-ordered protection from creditors until June 24.

Creditor protection was slated to end April 30 after it was extended by the court in late March as part of ongoing Companies' Creditors Arrangement Act (CCAA) proceedings.

According to court filings in the Ontario Superior Court of Justice, the landlords said they could be forced to respond to hundreds of claims without an extension, which they believed would “severely strain the applicants’ and the additional stay parties’ limited and already stretched resources” and “jeopardize the applicants’ ability” to successfully restructure their operations.

The landlords behind 11 insolvent corporations — Aruba Butt, Ryan Molony and Dylan Suitor — filed for protection from creditors in the Ontario Superior Court of Justice in late January, claiming they owe more than $144 million in unpaid loans and have less than $100,000 in the bank amid rising interest rates and falling real estate prices.  

“I am satisfied that the proposed extension of the stay of proceedings is in the Applicants’ best interests and those of their stakeholders, is consistent with the purposes of the CCAA, and is appropriate in the circumstances,” said Ontario Superior Court Justice Peter J. Cavanagh in his endorsement of an April 12 court order granting the extension.  

The corporations have also entered into a sale, refinancing and investment solicitation process that will allow the group to place a number of properties on the market with the assistance of real estate brokerage CBRE Limited, which specializes in commercial real estate services and investments. 

SISP advisors Howards Capital Corp. have also been ordered to begin the solicitation process to all known potential bidders by no later than April 29.  

Seven of the insolvent corporations collectively own 201 rental properties in Sault Ste. Marie, 79 of which sit vacant. All of the corporations listed in the ongoing insolvency proceedings have one thing in common: All of the corporations are closely linked to Burlington-based SID Developments, SID Management and SID Renos — all of which list former child actor and real estate investor Robert ‘Robby’ Clark as president and CEO.

The SID family of companies was founded by Clark, a former child actor known for his starring role on The Zack Files, a Canadian sci-fi television series that aired on YTV from 2000 to 2002, according to the IDMB website.

Together, the SID companies and the 11 insolvent corporations are referred to in court documents as a group of companies “specializing in the acquisition, renovation and leasing of distressed residential real estate in undervalued markets throughout Ontario.”

Together, the group of insolvent SID-affiliated corporations own more than 600 rental properties in housing markets across the province with lower average costs of living, including Timmins, Sudbury and the Sault — making it “one of the largest holders of residential real estate in Ontario,” wrote Justice Kimmel during insolvency proceedings.

Clark, Butt, Molony and Suitor were all scheduled to be interviewed by KSV Restructuring, the court-appointed monitor overseeing the insolvency proceedings, in late April and early May as part of its investigation into other potential assets held by the landlords. In March, SooToday revealed that Zack Files Real Estate — a SID-affiliated corporation not involved in the ongoing insolvency and restructuring — is attempting to sell off four properties in the Sault.

Zack Files Real Estate initially purchased a total of seven properties locally in 2021. Records indicate that all of the properties were purchased simultaneously at a combined price tag of $2.65 million. 

Butt — the chief information officer for SID Developments who is believed to be Clark's partner — signed for the purchase of the buildings as a director of the corporation.