Toronto’s massive The One mixed-use project has been placed in receivership as it grapples with more than $1.2 billion in debt.

An Ontario Superior Court judge has approved South Korean lender KEB Hana Bank’s application to appoint Alvarez & Marsal Canada as the receiver in the case. Sam Mizrahi, a local real estate developer, and Jenny Coco, who heads a road paving business, co-own The One on a 50-50 basis.

The 85-storey project includes condo, hotel and retail components.

KEB Hana has agreed to provide an additional $315 million to ensure that the project is completed, Alvarez & Marsal confirmed.

Sam Mizrahi, a local real estate developer, and Jenny Coco, who heads a road paving business, co-own The One equally. But their relationship has become “increasingly acrimonious and dysfunctional” due to lawsuits and arbitration cases between them, KEB Hana said in the receivership application.

In a statement that it provided to Connect, Mirazhi’s development company said the court has provided a limited-scope receiver to overcome an “ongoing governance issue” that has caused “significant project delays.”

Mirazhi will continue to lead the development.

“As part of this arrangement, the receiver has requested that Sam Mizrahi and his company remain as the developer and general Contractor to oversee completion of The One,” said the development firm.

Mizrahi maintains his equity position in the project. The company called the receivership “a welcome” decision that will ensure The One’s “successful completion.”

Canada’s commercial real estate valuations may be at greater risk of decline than previously anticipated due to higher interest rates, the country’s top banking regulator has warned.

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