A $60M deposit and seven towers that never rose - now the lender takes the lot
British Columbia's Court of Appeal has refused to block the sale of a stalled Richmond development to its lender, Romspen Investment Corporation, by credit bid.
The June 2, 2026 decision, GEC (Richmond) GP Inc. v. MNP Ltd., 2026 BCCA 240, concerns an entire Richmond city block once planned for seven residential and commercial towers, a project that never got past the excavation stage.
Romspen agreed in 2019 to lend the developers up to $422 million to build the site, advancing its own money and trying to syndicate the rest. By March 2020 it had advanced about $143.6 million before telling the developers it would stop funding, saying it could not syndicate the remaining loans. The developers could not find replacement financing and sought creditor protection under the Companies' Creditors Arrangement Act in April 2020.
Two court-run sales processes failed to produce a viable bid. Early this year, the monitor, MNP Ltd., asked the court to approve a deal letting Romspen take the property through a credit bid - in effect applying the debt it is owed toward the purchase price instead of paying cash. Justice Fitzpatrick of the Supreme Court of British Columbia approved the order in April 2026, calling it the only option to preserve and maximize value for everyone with a stake.
The developers and GEC sought to appeal. GEC had paid a $60 million deposit in 2018 to buy two of the planned towers and had agreed to let Romspen's mortgage rank ahead of its own. Both argued the lower court was wrong to approve a credit bid while the amount of Romspen's credit bid was still undetermined and related claims unresolved, and that the order would limit their ability to challenge the transfer or recover later.
Justice Mayer was unmoved. Leave to appeal a CCAA order is granted sparingly, he wrote, because the decisions are highly discretionary and the supervising judge is deeply steeped in the details of the case. He found the proposed appeals had little chance of success and, even if granted, would not leave the developers or GEC better off. The developers' set-off claim, Justice Fitzpatrick had observed and Justice Mayer agreed, is "unproven and tentative at best," and any final result is "years away."
Timing mattered. The sale is set to close at the end of July 2026, and the court accepted the appeals could not realistically be heard before then. Delay carried a price of its own: site preservation costs of $200,000 a month and interest on secured debt mounting at more than $5 million a month.
The broader fight is not finished. A 10-day hearing on the underlying liability claims is scheduled before another judge in October 2026, and Romspen's request to take an earlier ruling to the Supreme Court of Canada remains outstanding.
For advisors watching the private credit space, the decision is a reminder of how heavily courts lean on monitors and secured lenders when a distressed project has run out of cash buyers - even though the court stressed this case turned on its own unusual facts.
