Servus Credit Union wins receivership fight over Fort McMurray warehouse
Justice Michael J. Lema, who heard the matter July 3, 2026, sided with the lender. The ruling turned largely on how little room was left in the property’s value once every claim ahead of the borrower’s own interest was counted.
Servus’s mortgage-backed claim stood at $4,289,528.79 as of May 4, 2026, with per-diem interest of $926.93 continuing to accrue. Add unpaid property taxes of $89,980.55, a $25,707 lien and accumulated additional interest, and the property-backed debt reached roughly $4.48 million. Even using the borrower’s own appraisal – a Gettel Appraisals valuation topping out at $4,740,000 – the court calculated gross equity of only $260,629.26, about 5.5 per cent of that value, before even subtracting a $149,310 sale commission and other disposition costs.
Justice Lema found that residual cushion could not absorb what the borrower was proposing. The CCAA plan called for three priority charges – a $350,000 administration charge, a $500,000 DIP lender’s charge and a $200,000 directors’ charge – totaling $1,050,000, all ranking ahead of Servus’s existing mortgage and security. The borrower did not provide a refinancing or sale plan showing how incurring those charges would generate enough value to justify the risk. As the judge put it, the borrower was effectively asking Servus to accept exposure up to $1,050,000 “with no evidence or even considered forecast” of any resulting benefit.
The decision leans on a broader line of Canadian case law holding that where a secured lender is the only stakeholder with real skin in the game, a CCAA process is harder to justify, since its added cost and delay serve little purpose if there is nothing left over for other creditors. Justice Lema concluded Servus was “effectively the only affected stakeholder,” whether the property eventually sold at $4.74 million, $4.2 million or $4 million.
The court approved Servus’s application to appoint BDO Canada Ltd. as receiver, on the terms set out in its draft order.
