Executive Summary: Key Legal and Evidentiary Issues

• Romspen Investment Corp., the senior secured creditor owed approximately $143.6 million in advances, sought to acquire the Alderbridge development property via a credit bid under CCAA proceedings.

• Opposing parties (Alderbridge Group/Guarantors and GEC) argued Romspen had "no credit to bid" due to unresolved set-off claims and pending Related Actions challenging the lender's debt and conduct.

• The Court of Appeal had remitted key liability issues back to trial, including whether Romspen breached the Loan Agreement by ceasing to fund, leaving the net quantum of Romspen's claim undetermined.

• Two extensive sales processes over four years produced no cash offers approaching even Romspen's admitted advances, with the Second SISP yielding bids 30–50 percent lower than the first.

• Structural deterioration of the open excavation site, escalating preservation costs of $200,000 monthly, and risk of losing the New Building Permit created urgent pressure to complete a transaction.

• Equitable set-off was found not to extinguish Romspen's existing debt claim or invalidate its first-ranking security, and the CCAA court retained jurisdiction to approve the sale notwithstanding outstanding Related Actions.

The "Atmosphere" development and the parties involved

The case centres on a large, partially completed development property located at 7960 Alderbridge Way and 5333 and 5411 No. 3 Road in Richmond, British Columbia, intended to become a seven-tower residential and commercial project called the "Atmosphere." The petitioners — Alderbridge Way GP Ltd., Alderbridge Way Limited Partnership, and 0989705 B.C. Ltd. (collectively, the "Alderbridge Group") — owned and held title to the property. Romspen Investment Corp. ("Romspen") was the senior secured creditor, having agreed to provide up to $422 million in construction financing under a Loan Agreement. By March 2020, Romspen had advanced approximately $143.6 million before refusing to advance further funds, claiming it was not obligated to do so. This stalled the project, and the Alderbridge Group filed for creditor protection under the Companies' Creditors Arrangement Act ("CCAA") on April 1, 2022. At that time, the property had been excavated but no significant construction had taken place beyond that stage. GEC (Richmond) GP Inc. and Global Education City (Richmond) Limited Partnership (collectively, "GEC"), which had paid a deposit of $60 million to purchase two of the future towers, held a third-ranking mortgage on the property, subordinated to Romspen's security.

The lending dispute and related litigation

Prior to and during the CCAA proceedings, multiple lawsuits (the "Related Actions") were filed. The Alderbridge Group and its Guarantors filed an action against Romspen, GEC filed a separate action against Romspen, and Romspen filed an action against the Alderbridge Group/Guarantors. Romspen also advanced a counterclaim against GEC within the GEC Action. A 20-day liability trial before Justice Majawa in April/May 2024 initially found in Romspen's favour on all counts, including that Romspen had acted in good faith and was entitled to cease funding and did not breach the Loan Agreement. However, on appeal in September 2025, the BC Court of Appeal set aside key portions of the trial judgment, finding that Romspen did not have the right to cease funding on the basis that its syndication failed, and remitted several issues back to the trial court — including whether Romspen was in breach on other grounds, the liability of the Guarantors, and whether there was an implied term in the Subordination Agreement requiring Romspen to fund its obligations to the debtors. A further 10-day hearing was scheduled from October 13–23, 2026, with final resolution of the Related Actions likely years away. Romspen also sought leave to appeal to the Supreme Court of Canada.

The sales processes and building permit complications

The Monitor, MNP Ltd. (which merged with The Bowra Group Inc.), conducted two extensive sales and investment solicitation processes. The Initial SISP in 2022 generated multiple bids, but bidders were concerned about the lack of a building permit — the original had expired, and a new building code adopted in 2018 required amendments to the development permit and potentially a loss of density. The Monitor terminated the Initial SISP in December 2022 with no acceptable offers. It then incurred $2.1 million in costs preparing a new building permit application, filed by the City of Richmond's November 1, 2023 deadline. The Second SISP launched in August 2024 involved outreach to over 1,479 potential purchasers. Its results were described by the Monitor as disappointing — seven bids were received but all were substantially below Romspen's Credit Bid Amount by a significant margin, and the only unconditional cash-only offer was extremely low in comparison. The Monitor concluded that a conventional sale structure was inadequate, and that maximum value realization for creditors required project completion rather than an immediate sale. Meanwhile, the property sat as an open excavation site in the middle of Richmond, requiring ongoing shoring and dewatering at approximately $200,000 per month, with a temporary berm that had never been intended as a long-term structure and was deteriorating. The City of Richmond had expressed concerns about site safety and indicated it might require the excavation to be filled in, which would be both substantial and expensive.

Romspen's credit bid and the proposed transaction

On January 15, 2026, the Monitor and Romspen (or its assignee) executed a Purchase and Sale Agreement. The purchase price comprised a deposit of $1,000, a cash amount of about $2.75 million to satisfy court-ordered priority amounts and wind up the CCAA proceedings, and a credit up to a specified maximum amount against the indebtedness owing by the Alderbridge Group to Romspen. The Credit Bid Amount was to be reduced by approximately $14.9 million following a settlement regarding Governmental Development Charges. Romspen was to assign the agreement to RIC (No. 3 Road) Holdings Inc., a single-purpose entity, with The Onni Group involved as the developer to complete the project. The transaction also incorporated elements of a reverse vesting order ("RVO"), with excluded assets and claims transferred to Alderbridge GP as "ResidualCo."

Opposition to the credit bid

The Alderbridge Group/Guarantors and GEC vigorously opposed the transaction, arguing that Romspen had "no credit to bid" because the net quantum of its claim remained undetermined, that the Procedural Order and outstanding Related Actions precluded the CCAA court from considering the sale, that approval would constitute an abuse of process, and that the AVO was fatally flawed for lacking protective conditions such as a holdback, trust mechanism or cash security. They alternatively sought either approval only on the basis of Romspen paying the full purchase price in cash to be paid into court pending resolution of the Related Actions, or a further (third) expedited sales process completed within 90 days for cash-only bids with proceeds held in trust. GEC also requested that the court order the parties into mediation, although there was no formal application for such relief.

The court's analysis and ruling

Justice Fitzpatrick methodically rejected each ground of opposition. She found that Romspen undeniably held a valid first-ranking mortgage, had advanced approximately $143.6 million (which the Alderbridge Group itself had admitted in its original CCAA petition), and that the assertion of equitable set-off does not extinguish a creditor's claim or invalidate its security — both claims continue to exist as a matter of law until judgment is rendered and equitable set-off granted. The court confirmed it retained full jurisdiction under sections 11 and 36 of the CCAA to consider the credit bid notwithstanding the outstanding Related Actions and the earlier Procedural Order, which was a case management decision, not a surrender of supervisory authority. The abuse of process argument was similarly dismissed. On the balancing of section 36(3) factors and the Soundair principles, the court found that the sales processes were robust and adequate, no party raised any issues as to the adequacy of the Monitor's efforts or the efficacy and integrity of the sales process, the Monitor approved the process and the transaction, creditors were adequately consulted, and no viable alternative existed. The court emphasized the urgent risks — structural deterioration, escalating costs, the possible loss of the New Building Permit which would diminish the property's value by many tens of millions of dollars, and a continued decline in the real estate market. No protective conditions were imposed, as the court found that opposing the credit bid could not serve as a backdoor means by which to secure a claim under equitable remedies where the usual considerations were not addressed.

Ultimately, Madam Justice Fitzpatrick approved the Transaction and granted the Approval and Vesting Order on the terms sought, concluding that proceeding with Romspen's credit bid was the only viable and value-maximizing path forward for the CCAA proceedings. The opposing parties' claims in the Related Actions, including their equitable set-off defence, remain available to be pursued against Romspen directly. The exact Credit Bid Amount was contained in sealed confidential supplements, though the court noted that Romspen's admitted advances of approximately $143.6 million were less than the Credit Bid Amount, and Romspen was also owed approximately $8.7 million in interim financing.