Fourth syndicated mortgage claim filed

Fourth syndicated mortgage claim filed

Fourth syndicated mortgage claim filed After promises of nearly a dozen additional pending claims, a fourth one has been filed.

Bryan Madryga, an investor in the Harmony Village-Lake Simcoe project in Barrie, has brought forth a fourth claim against Fortress Real Capital. Other defendants include Fortress executives Jawad Rathore, Vincent Petrozza, as well as Building & Development Mortgages Canada (BDMC), FMP Mortgage Investments, and a number of individuals.

This latest claim was filed December 2.

“This is the fourth statement of claim issued against Fortress et al. This raises the claims to about $100 million,” David Franklin, a real estate lawyer close to the case, told MortgageBrokerNews.ca via email. “This one is the first to include a fraud claim.”

The claim alleges “BDMC knowingly acted in a manner that resulted in the facilitation of dishonesty, fraud, crime and illegal conduct” and that “FMP knowingly acted in a manner that resulted in the facilitation of dishonesty, fraud, crime and illegal conduct.”

The plaintiff is requesting that all money paid to or held by Fortress Developments or any defendants as advances be paid into Court; an accounting of all funds received; disgorgement of all earned profits in the Harmony Simcoe Project; general damages in the amount of $25,000,000; and punitive damages in the amount of $2,500,000, among others.

This claim follows similar suits brought forth against Fortress and various syndicated mortgage sellers, including one related to the bankrupt Mady Collier Centre in Barrie and a development in Scarborough called Empire Pace.

For its part, Fortress plans to defend this as well as the other pending suits.

“Fortress Real Developments Inc. (FRDI) was not the builder, borrower or developer of this project, nor did it negotiate or broker any loans in respect of this project.  Rather, FRDI’s role in this project was limited to that of a development consultant,” Natasha Alibhai, brand and communications manager for Fortress Real Developments, wrote in an email to MortgageBrokerNews.ca. “A Fortress affiliate recently acquired this project by way of power of sale proceedings. 

“In so doing, the original syndicate mortgage lenders that entered into loans with Harmony Village – Lake Simcoe Inc., the former builder-borrower developer, have been given a new charge on the property in respect of the new project.  As such, any purported class has no loss or damage.
 
“Fortress intends to vigorously defend itself in this action.  Fortress will be bringing a motion to strike this action, as it has done in each of the other proposed class actions, which have all been initiated by the same lawyers.”