An Ontario court judge has ordered the cancellation of the purchase agreements for nearly all condos sold at the troubled One Bloor West development in Toronto.

Justice Peter Osborne approved a request from court-appointed monitor Alvarez & Marsal to rescind 314 of 329 presale contracts, leaving just 15 agreements in place after they were deemed “economically viable” by court-appointed monitor Alvarez & Marsal. Most of the original buyers purchased units in 2017 and 2018, when the project was marketed under the Mizrahi Developments banner, according to court filings.

The decision comes after Tridel was appointed as project manager, construction manager, and sales manager for the project formerly known as The One, an ambitious 85-storey mixed-use tower in downtown Toronto.

While appointing Tridel, the court also granted an application to convert the receivership into creditor protection proceedings under the Companies’ Creditors Arrangement Act (CCAA), allowing for a more structured restructuring process. Alvarez & Marsal switched to court-appointed monitor from its receiver role.

As a result of this week’s court decision, unit owners will receive their initial deposits and accrued interest. They will also have the option to repurchase the condos.

After that process is complete, Alvarez & Marsal intends to sell the condos higher prices. The monitor said in a court filing that the contract cancellations are likely to generate more than $200 million proceeds.

During a court hearing, Osborne noted that buyers do not always get their deposits back when a developer goes bankrupt, The Toronto Star reported. The judge called the plan “a great deal, better than nothing,” while pointing out that significant funds were advanced by secured creditors who are unlikely to be repaid, according to The Star.

Pictured: The One mixed-use project in downtown Toronto.

Image: SKYGRiD