Deal to sell property of bankrupt Montessori school collapses
Friday, November 16, 2012
BY CHRIS COBB
The Canadian Montessori Academy off Merivale Road in Nepean, which owes about $2 million to numerous creditors, was placed in court-ordered receivership in July and has since been rented by a school operated by the World Somali Congress, which was expected to buy the building.
Photograph by: JULIE OLIVER, OTTAWA CITIZEN
OTTAWA — A deal to sell the bankrupt Canadian Montessori Academy and Tiny Tots building has fallen through and the property will soon be back on the market.
The debt-ridden Nepean school, which owes about $2 million to numerous creditors, was placed in court-ordered receivership in July and has since been rented by a school operated by the World Somali Congress which was expected to buy the building.
In a letter sent to parents Thursday, receiver BDO said that although the deadline for the sale had been extended, the Congress had been unable to close the deal.
“We are disappointed in this turn of events,” said BDO spokesman John Haralovich, “In the best interests of all stakeholders, the property must be marketed for sale.”
The Fieldrow Street school owes most money to secured creditors, including the Business Development Bank of Canada ($813,000), Canada Revenue Agency ($680,000) and the City of Ottawa ($501,000). All are expected to get their money when the building is sold.
Less fortunate will be unsecured credits, who are owed $875,000 — including a $350,000 debt to parents who paid advance fees. When secured creditors, BDO’s fees and legal fees are paid, they are expected to receive only a fraction of what they are owed.
It remains to be explained how the school owners were allowed to accumulate such huge debts with CRA and the Business Development Bank.
Any future deal to sell the building has to be approved by a court.
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