APPLICATION RECORD - VOLUME I of II (Appointment of Receiver)
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Court File No. CV-20-00654057-00CL ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST B E T W E E N : FIRST COMMERCIAL BANK Applicant - and - ZM GLOBAL INC. AND HONG LOU XU (a/k/a HONGLOU XU) Respondents IN THE MATTER OF THE RECEIVERSHIP OF ZM GLOBAL INC. AND HONG LOU XU (a/k/a HONGLOU XU) AND IN THE MATTER OF AN APPLICATION UNDER section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 as amended, and section 101 of the Courts of Justice Act, RSO 1990, c C.43, as amended APPLICATION RECORD - VOLUME I of II (Appointment of Receiver) January 5, 2021 FASKEN MARTINEAU DuMOULIN LLP Barristers and Solicitors 333 Bay Street, Suite 2400 Bay Adelaide Centre, Box 20 Toronto, ON M5H 2T6 Stuart Brotman (LSO: 43430D) [email protected] Daniel Richer (LSO: 75225G) [email protected] Tel: 416 865 4445 Fax: 416 364 7813 Lawyers for the applicant - 2 - TO: ZM GLOBAL INC. 2750 14th Avenue, Suite 202 Markham, Ontario L3R 0B6 AND TO: HONG LOU XU 2750 14th Avenue. Suite 202 Markham, ON L3R 0B6 - and - 17 Equestrian Court North York, ON M2H 3M9 - and - 36 Dodie Street Aurora, ON L4G 2L2 -and- 6 Blue Grass Drive Aurora, ON L4G 6W4 -and- 6 Sangster Road Whitchurch-Stouffville, ON L4A 7X4 Court File No. CV-20-00654057-00CL ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST B E T W E E N : FIRST COMMERCIAL BANK Applicant - and - ZM GLOBAL INC. AND HONG LOU XU (a/k/a HONGLOU XU) Respondents IN THE MATTER OF THE RECEIVERSHIP OF ZM GLOBAL INC. AND HONG LOU XU (a/k/a HONGLOU XU) AND IN THE MATTER OF AN APPLICATION UNDER section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 as amended, and section 101 of the Courts of Justice Act, RSO 1990, c C.43, as amended TABLE OF CONTENTS TAB DOCUMENT 1. Notice of Application Schedule “A” – Zoom Meeting Details Schedule “B” – Draft Receivership Order Schedule “C” – Blackline from CLUC Model Order to Draft Receivership Order 2. Affidavit of Wenfei Chen sworn December 24, 2020 Exhibit “A” – Profile Report – ZM Global Exhibit “B” – Parcel Registers – Keele Condos Exhibit “C” – Improve Canada – About Us Page Exhibit “D” – Profile Report – Greensteel - 2 - Exhibit “E” – Commitment Letter Exhibit “F” – Mortgage Exhibit “G” – Guarantee Exhibit “H” – GSA Exhibit “I” – PPRS Search Certificate – ZM Global Exhibit “J” – PPRS Search Certificates – Hong Lou Xu Exhibit “K” – Keele Condo Lien Exhibit “L” – Notice of Power of Sale for Arrears of Common Expenses Exhibit “M” – Parcel Registers – Grand Magazine Condos Exhibit “N” – Parcel Register – Capreal Condo Exhibit “O” – Parcel Registers – Queens Wharf Condos Exhibit “P” – Parcel Registers – Bastion Condos Exhibit “Q” – Transfer of Grand Magazine Condos Exhibit “R” – Transfer of Capreal Condo Exhibit “S” – Transfer of Queens Wharf Condos to Xiao Exhibit “T” – Transfer of Queens Wharf Condos from Xiao Exhibit “U” – Transfer of Bastion Condos to Xiao Exhibit “V” – Transfer of Bastion Condos from Xiao Exhibit “W” – Initial Demand Letter Exhibit “X” – Notices of Sale Exhibit “Y” – Notice of Application – Power of Sale Exhibit “Z” – Renewed Demand Letters and NITES Exhibit “AA” – Affidavit of Maryam Tabatabaei Exhibit “BB” – Consent of Spergel Court File No. CV-20-00654057-00CL ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST B E T W E E N : FIRST COMMERCIAL BANK Applicant - and - ZM GLOBAL INC. AND HONG LOU XU (a/k/a HONGLOU XU) Respondents IN THE MATTER OF THE RECEIVERSHIP OF ZM GLOBAL INC. AND HONG LOU XU (a/k/a HONGLOU XU) AND IN THE MATTER OF AN APPLICATION UNDER section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 as amended, and section 101 of the Courts of Justice Act, RSO 1990, c C.43, as amended NOTICE OF APPLICATION TO APPOINT RECEIVER TO THE RESPONDENTS: A LEGAL PROCEEDING HAS BEEN COMMENCED by the Applicant. The claim made by the Applicant appears on the following page. THIS APPLICATION will come on for a hearing before a Judge of the Ontario Superior Court of Justice (Commercial List) on January 15, 2021 at 10:00 a.m. Toronto time, or as soon after that time as the application can be heard, by judicial videoconference via Zoom at Toronto, Ontario, in accordance with the Changes to Commercial List operations in light of COVID-19 practice direction dated March 16, 2020, and the Consolidated Notice to the Profession, Litig- ants, Accused Persons, Public and the Media, dated May 13, 2020, issued by Chief Justice Morawetz. The Zoom conference call- IF YOU WISH TO OPPOSE THIS APPLICATION, to receive notice of any step in the application or to be served with any documents in the application you or an Ontario lawyer acting for you must forthwith prepare a notice of appearance in Form 38A prescribed by the Rules of Civil - 2 - it on the Applicant, and file it, with proof of service, in this court office, and you or your lawyer must appear at the hearing. IF YOU WISH TO PRESENT AFFIDAVIT OR OTHER DOCUMENTARY EVIDENCE TO THE COURT OR TO EXAMINE OR CROSS-EXAMINE WITNESSES ON THE APPLICATION, you or your lawyer must, in addition to serving your notice of appearance, serve r, where the Applicant does not have a lawyer, serve it on the Applicant, and file it, with proof of service, in the court office where the application is to be heard as soon as possible, but at least four days before the hearing. IF YOU FAIL TO APPEAR AT THE HEARING, JUDGMENT MAY BE GIVEN IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO OPPOSE THIS APPLICATION BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE. 30 Date: December 29, 2020 Issued by: Local Registrar 9th Address of Court Office: 330 University Ave, 7th Floor Toronto, Ontario M5G 1R7 TO: ZM GLOBAL INC. 2750 14th Avenue, Suite 202 Markham, Ontario L3R 0B6 AND HONG LOU XU TO: 2750 14th Avenue. Suite 202 Markham, ON L3R 0B6 - and - 17 Equestrian Court North York, ON M2H 3M9 - and - 36 Dodie Street Aurora, ON L4G 2L2 -and- 6 Blue Grass Drive Aurora, ON L4G 6W4 -and- 6 Sangster Road Whitchurch-Stouffville, ON L4A 7X4 APPLICATION 1. THE APPLICANT MAKES APPLICATION FOR: (a) B Receivership Order 1 inter alia: (i) abridging the time for service of the notice of application and the application record herein, if necessary, and validating service thereof; (ii) appointing msi Spergel inc. Spergel (in such capacity, the Receiver , undertakings and properties of ZM Global Inc. ZM Global (also known as Honglou Xu) (the Guarantor Debtors Real Property and Property section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 as amended BIA section 101 of the Courts of Justice Act, RSO 1990, c CJA (iii) empowering the Receiver, if appointed, to, inter alia: (A) take possession of and exercise control over the Property; 1 A C . - 4 - (B) market and sell any or all of the Property; (C) investigate the circumstances surrounding the Dispositions (defined below), including as deemed appropriate by the Receiver, by examining the Guarantor and the other parties to those transactions under oath; (D) engage counsel for the applicant, Fasken Martineau DuMoulin LLP Fasken , as its counsel in respect matters for which there would be no conflict of interest; and (E) on to fund the costs of the receivership; and (iv) awarding the applicant its costs of this proceeding, including HST charged thereon; and (b) such further and other relief as counsel may advise and this Honourable Court may deem just. 2. THE GROUNDS FOR THIS MOTION ARE: (a) the Debtors are indebted to the applicant on account of principal and interest owing in respect of a secured non- Loan , which indebtedness, as at November 4, 2020, was in the amount of $2,070,366.09; - 5 - (b) the applicant has incurred and continues to incur costs in relation to the Loan and the enforcement thereof; (c) the Guarantor guaranteed all debts, liabilities and obligations of or owing by ZM Global to the applicant; (d) among other security, ZM Global granted a mortgage in favour of the applicant against the Real Property Mortgage ich Mortgage was guaranteed by the Guarantor; (e) as further security, the Debtors granted security interests in favour of the applicant against the Property pursuant to a general security agreement ( GSA ), which security interests are perfected by registration under the under the Personal Property Security Act, RSO 1990, c P.10; (f) the Debtors are in default of their obligations to the applicant because, among other reasons: (i) the Debtors have failed or refused to repay the amounts they owe to the applicant, despite repeated demands for payment; (ii) ZM Global has failed to pay amounts owing to York Region Standard Condominium Corporation No. 1311 Condo Corp which governs the building in which the Real Property is situated, and such failure has resulted in the Condo Corp registering a lien against the Real Property; (iii) the Guarantor disposed of nine residential condominium units (including five units for no consideration) Dispositions ; - 6 - (g) the applicant has concerns with respect to the bona fides of the Dispositions and their potential impact upon the applicant ; (h) the applicant has made demand upon the Debtors for repayment of the indebtedness to the applicant and the Debtors have failed or refused to pay the amounts owing to the applicant; (i) the applicant delivered to the Debtors notices of intention to enforce security pursuant to the BIA; (j) the most expedient and appropriate mechanism for dealing with the enforcement of the appli (k) the applicant is entitled to appoint a receiver under the Mortgage and the GSA; (l) the appointment of the Receiver