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Mortgage Broker News | 26 Aug 2016, 08:15 AM Agree 0
Two plaintiffs are seeking millions of dollars in damages after a project they invested in went belly up
  • Dave | 26 Aug 2016, 09:53 AM Agree 0
  • Ron Butler | 26 Aug 2016, 09:55 AM Agree 0
    There will likely be more of these lawsuits and there is an additional danger that agents and brokers who refer investors to the various brokerages who market these large syndications will also be named in future litigation even though all they did was refer someone to a seminar.
  • Dave | 26 Aug 2016, 10:01 AM Agree 0
    Am I reading that statement of claim right? They're also suing FSCO ??
  • Dave | 26 Aug 2016, 10:04 AM Agree 0
    You have to think Fortress designed their business and contracts with investors to not lose in court when the S%#$ hits the fan....

    any experts here to chime in?
  • Dean Koeller | 26 Aug 2016, 10:10 AM Agree 0
    It is very disappointing to have activities like this highlighting in our industry. There are so many hard working, honest industry members who are committed to doing right thing for the public.

    As an industry we have to do more to educate ourselves on performing due diligence to identify the deals that have excessive risk factors.

    A big one is lending on a construction project based on the completed value. The second is understanding the reasonableness of fees and cost associated with these kinds of projects.

    We may not be able to stop people form selling bad investments, but we should be able to do more in educating investors to better identify poor investments opportunities.
  • Chris | 26 Aug 2016, 10:23 AM Agree 0
    Let's not be too quick to criticize members of our own community based on allegations yet to be proven in court. If we are, then perhaps we aren't really a community at all. Communities don't eat their own. A quick look behind the curtain of this suit reveals that the people behind the allegations may have their own agenda.
  • Ron Butler | 26 Aug 2016, 10:26 AM Agree 0
    Yup, they are suing FSCO for failure to enforce their own rules and guidelines. Fortress employs very good, very expensive lawyers, this case could be in court for 5 or 7 years.
  • Real Estate Player | 26 Aug 2016, 10:36 AM Agree 0
    Typical rookies with 1 motive. PERSONAL PROFIT$ $ $, without any regard for their clients.
  • Barrie Resident | 26 Aug 2016, 10:50 AM Agree 0
    Fortress bought the project and is building it, I see the work going on daily. Other than time, what have these investors lost?
  • George Christopoulos | 26 Aug 2016, 11:05 AM Agree 0
    I attended a presentation to investors many years ago put on by Fortress and a Financial planner.

    Not once was risk mentioned only the return.

    Fortress can build it BUT it does not mean the value will be there on the take out financing and the Syndicated investors are well down the line in terms of positon.

    Buyer beware : when something looks too good to be true , it normally is.

    Greedy suppliers and investors
  • Simon Reynolds | 26 Aug 2016, 11:17 AM Agree 0
    Let's not throw the baby out with the bath water yet. Read the history of this project. Previous developer went bankrupt in this project and at least 6 others. These guys came in to buy it and save it to protect themselves and investors. Looks like these guys also have at least a dozen projects completed and investors paid out on those projects. It's "allegedly" and "claimed". Let's watch this unfold before jumping all over everyone.
    - SR
  • Ron Butler | 26 Aug 2016, 11:37 AM Agree 0
    Mr. Reynolds you are correct, several completed projects are fully paid out but all the Brad Lamb Edmonton projects are "on hold" so what does that mean to the Ontario investors? Far more projects still in progress than completed. All litigation is allegation till conclusion of the trial, that is 100% true. I think the central argument is should the whole category of very large syndicated mortgage projects be switched from FSCO to the OSC where it really belongs.
  • Mr. Gotham | 26 Aug 2016, 11:51 AM Agree 0
    Simon, "These guys", ie Fortress, were the ones that picked the previous developer, Mady, and handed him the money, carte blanche. I'm fairly certain that a forensic exam of Mady's financials would show that he was in significant financial distress at the time that Fortress funded him. They money forwarded from Fortress went to an unsegregated Mady account and there is evidence in the original BK documents that some of this money was spent elsewhere. There is no evidence that Fortress did any kind of audit or monitoring of the use of funds. Fortress has not saved the original project. They bought the asset out of bankruptcy and raised more debt in a new entity to attempt to finish it (still not done). The original entity that the plaintiffs invested in has no assets. They were given the equivalent of a sixth lien claim in the new entity. It would take a miracle for these people to be made whole on their investment. I believe it will be shown that the Fortress estimates of value when these folks invested were substantially inflated.
  • Nobody who Knows Nothing | 09 Sep 2016, 09:25 AM Agree 0
    The need for Unified National Regulator has never been greater given such cases as above. Do your research investors. Rathore was already kicked out of BC by the Commission there, found guilty of financial negligence. There needs to be a national database so these boys stop jumping province to province....
  • Joe | 21 Sep 2016, 02:37 PM Agree 0
    I'm surprised that Cushman and Wakefield that gave the a valuation of the site of $ 21,840,090 less than two years after it was purchased for $ 2M did not get sued. The value that was it was promoted at in order to entice Investors.
  • John Bald | 01 Nov 2016, 10:09 AM Agree 0
    What about the condo., development in Port Dalhouise in St. Catharines, that is another Fortress financed project that has folded. You cant expect to make money when you are a 3rd and 4th, mortgage on developments that are ourside the GTA, the upside is not always achievable. There will be further claims and problems for Fortress in future I'm sure.
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