Unaudited and Untested: The Monitor's Report on Robert Clark and the SID Companies
Robert (Robby) Clark led the operating companies behind one of Ontario's largest rental housing groups. In January 2024 the group obtained protection under the Companies' Creditors Arrangement Act (the "CCAA"), Canada's principal corporate restructuring statute, and the court appointed a Monitor, an insolvency professional who reports to the court. What follows is drawn from the Monitor's own reports, the court's endorsements and sworn evidence, with a citation for every statement.
What the Court, the Monitor and the Regulator Have Said
- CourtNo court has found that Robert Clark or the companies misappropriated funds. The court held that the companies "are entitled to test the evidence put against them" by cross-examination. The motions were resolved on consent the next day, and no approval of the Monitor's report was sought. Endorsement of Justice Osborne (Jun 24, 2024), para 13; Endorsement of Justice Osborne (Jun 25, 2024), paras 2 and 8
- MonitorThe report behind the headlines was unaudited. The Monitor states that it "has not audited, or otherwise attempted to verify" the financial information, that it "makes no findings" on funds outside the companies' bank accounts, and that parts of the report "could be subject to revision". Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.4 para 6, s.3.0 paras 3, 5 and 8
- Monitor's interviewThe broker told the Monitor's counsel, under oath, where the Core Sale money went. On May 8, 2024 she said the funds paid to her firm were "immediately disbursed", "every penny", to the lenders. Five weeks later the Monitor reported that $11.08 million "appears to have been paid to the Applicants". Monitor's Document Brief to the Fourth Report, Vol. 5 (Jul 5, 2024), including the interview transcript of Claire Drage (May 8, 2024), Drage transcript qq. 170 to 173; Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 para 5
- RegulatorThe broker who raised the investor money has admitted to fraud. The settlement records that her statements to investors were "false and misleading" and that the borrowers "had little to no communication with the Investors". No borrower company was a respondent. OSC Settlement Agreement, Claire Drage et al. (Dec 16, 2025), paras 17, 39 and 52
- Monitor's numbersAt least $12.1 million went to professionals and DIP lenders. $748,503 of the loan reached renovations. The loan had been presented to the court as "immediate capital to renovate 98 properties". Fifteenth Report of the Monitor (Jul 21, 2026), s.9.0; First Report of the Monitor (Jan 29, 2024), s.5.2; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 33
From Report to Control: April 25 to June 25, 2024
Mr. Clark tells the Monitor's counsel in his interview that "eight figures" of promissory note loans were paid back on the closing of the Core Sale. Document Brief of the Monitor to the Fourth Report, Vol. 1 (Jul 5, 2024), including the interview transcript of Robert Clark (Apr 25, 2024), Clark transcript q. 161
A second director tells the Monitor's counsel under affirmation that on the Core Sale the broker provided the documentation "on who was getting paid out". Monitor's Brief of Documents to the Fourth Report, Vol. 2 (Jul 5, 2024), including the interview transcript of a second director (Apr 26, 2024), transcript q. 251
A third director tells the Monitor's counsel under affirmation that funds from the Core Sale "were repaid to lenders". Brief of Documents of the Monitor to the Fourth Report, Vol. 4 (Jul 5, 2024), including the interview transcript of a third director (May 6, 2024), transcript q. 166
The broker tells the Monitor's counsel under oath that Core Sale funds paid to her firm were disbursed to the lenders. Monitor's Document Brief to the Fourth Report, Vol. 5 (Jul 5, 2024), including the interview transcript of Claire Drage (May 8, 2024), Drage transcript qq. 170 to 173
The companies write to the Monitor that the $11.08 million was paid to The Lion's Share Group, and enclose the cheques. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 para 6
The Fourth Report is issued, unaudited, stating that the $11.08 million "appears to have been paid to the Applicants". The Monitor's counsel sends it to the full service list, including individual lenders and municipalities, as a file titled "FOR PUBLIC DISTRIBUTION". Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 para 5; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit I
The secured lenders' motion to expand the Monitor's powers is scheduled, with the Fourth Report as "the principal evidentiary basis". Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O, cover letter
The Monitor reports that it "does not intend approving any additional renovation costs". Fifth Report of the Monitor (Jun 17, 2024), Appendix D, note 4
The companies deliver more than thirty corrections, referenced to evidence the Monitor already held, and ask for a revised report. Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O
The Monitor states that the materials do not change its principal conclusions. No revised report is issued. Supplement to the Fifth Report (Jun 23, 2024), s.2.0 para 2
The court holds that the companies "are entitled to test the evidence put against them" by cross-examination. Endorsement of Justice Osborne (Jun 24, 2024), para 13
A consent order gives the Monitor the powers of the companies' board. The Fourth Report is never tested. Endorsement of Justice Osborne (Jun 25, 2024), paras 2 to 8
The Fourth Report's Principal Allegations, and the Record
These were the Monitor's conclusions. The court made no finding on any of them. The companies' full response, more than thirty items, is in The Response, Item by Item. The claims that appeared in news coverage are answered in What Was Reported, and What the Record Shows. The Monitor's own statements are set beside each other in The Monitor, in Its Own Words.
| The Fourth Report states | The record shows |
|---|---|
| $11,082,375.97 of the Core Sale proceeds "appears to have been paid to the Applicants in the form of promissory notes". | The broker told the Monitor's counsel under oath on May 8, 2024 that the funds paid to her firm went to the lenders. The companies wrote the same on June 10, enclosing the cheques. The Monitor reported otherwise the next day, while stating that it "is unable to prepare" an accounting of the proceeds. Monitor's Document Brief to the Fourth Report, Vol. 5 (Jul 5, 2024), including the interview transcript of Claire Drage (May 8, 2024), Drage transcript qq. 170 to 173; Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 paras 5, 6 and 9; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O, item A.12 |
| It "appears to the Monitor that the Principals diverted, misused or misappropriated funds". | The Monitor did not audit, "makes no findings" on funds outside the bank accounts, and "did not trace" the money sent to the real estate lawyers, the route by which it says property was bought "in almost all cases". The allegation was never tested in court. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.4 para 6, s.3.0 paras 3 and 5, s.5.2 para 3 |
| Expenses "in excess of $1 million" "appear personal in nature". | $1 million is 1.4 per cent of the $69.7 million reviewed. That $69.7 million counts only what passed through the companies' bank accounts. About $81.5 million of mortgage proceeds went directly to the real estate lawyers and is not in it. Against the two together, $1 million is under 1 per cent. The Monitor accepts that Home Depot and contractor purchases "may be legitimate business expenses" but says identifying them was "virtually impossible", although it held the card statements and a sample of receipts. The companies' evidence accounts for about $5.5 million of the $6 million paid to the principals, who generally took no salary. The expenses the report lists were, on that evidence, generally incurred around the Core Sale, which after repaying the lenders left $11.6 million for the selling companies and owners, more than ten times the amount alleged. The Fourth Report's own appendix shows the companies owing money to five of the related entities, not the reverse. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.1 para 3, s.2.5 para 1, s.3.0 para 1, s.5.2 para 6; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O, items A.1, A.3, A.5 and A.12; Fourth Report of the Monitor, redacted (Jun 11, 2024), Appendix 2 |
| $20.3 million was paid to related parties, and no invoices were produced for payments to SID Renos. | The Monitor's own net figure is $13.4 million. Of that, $1.8 million went to the company that carried out about $13.6 million of renovations, and invoices for $827,233 were delivered two weeks before the report. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.5 paras 1 and 2, s.3.0 para 6; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O, items A.4 and A.9 |
| "The Investors appear to have been misled as to how the funds they were lending to the Applicants would be used." | The companies did not raise the money or deal with the lenders. The broker's firms prepared the notes and the investor materials. The Monitor interviewed no lender. The broker has since admitted to fraud, and the regulator found her statements to investors "false and misleading". Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.4 para 6, s.5.1 para 7; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O, item A.8; OSC Settlement Agreement, Claire Drage et al. (Dec 16, 2025), paras 17, 39 and 52 |
| The companies "failed to provide all of the information requested in a timely manner". | The companies produced thousands of documents, including card statements, receipts, invoices and the trust ledgers for every property. They then identified more than thirty errors and asked for a revised report. None was issued. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.3.0 paras 6 and 8; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O, items A.5, A.6 and A.9; Clark affidavit paras 52 to 57; Supplement to the Fifth Report (Jun 23, 2024), s.2.0 para 2 |
The $11.08 Million, in the Words of the Record
The Monitor was told where this money went five times before it reported and twice after: by Mr. Clark in his interview with the Monitor's counsel on April 25, by a second director under affirmation on April 26, by a third director under affirmation on May 6, by the broker under oath on May 8, by the companies in writing on June 10 and June 19, and in sworn evidence on June 20, 2024. The Fourth Report has never been corrected.
"from the CC applicants, there was eight figures paid back in promissory note loans on closing of the Core deal."
Asked whose call it was which lenders were paid, the director answered that on the Core Sale "Claire would have provided documentation on her end on who was getting paid out and who is expected to get paid out", and that the parties in the statements given to the closing lawyers "would have been the parties that would have been paid out".
Asked "You don't know where the funds went from the Core sale, the profit?", he answered: "my understanding was that a lot of the funds from the Core sale were repaid to lenders and then some funds were also held back to complete properties that were to be renovated." Later in the same interview: "the majority of the sales proceeds went to paying down debt".
"I know how the proceeds of the sale were disbursed with regard to lenders that we brokered were paid back and Lion's Share being paid back."
"we immediately disbursed every penny that was applicable to go direct to the lenders that it applied to."
"proceeds of the sale get paid to Lion's Share. Some of these are retained by Lion's Share to discharge Lion's Share's loans and the other stream is then disbursed by Lion's Share to the individual lenders who had promissory notes that were issued by the Applicants."
"these are not promissory notes that were issued to the above-captioned parties"; "the vendors' real estate counsel was instructed to pay this amount to The Lion's Share Group Inc."
The $11,082,375.97 "appears to have been paid to the Applicants in the form of promissory notes".
Asked whether any notes went unpaid, she said only notes held by her own firm, on one company, and that she agreed to it: "the request was made and I was comfortable moving forward with it." Her understanding was that "some funds needed to be retained by the businesses in order to secure future financing."
The amounts repaid on the Core Sale were set by the broker's firm: "We did payout statements from the sale, so we knew exactly what was owed." A director had told the Monitor's counsel the same thing twelve days earlier, on April 26, 2024: the broker "would advise us on what needs to get paid", and the companies did not have "much control over picking and choosing what is getting paid". The companies' sworn evidence is that the lenders were repaid "in amounts that the Applicants believe to have been overstated by Windrose", and that their own reconciliation puts the unsecured debt at about $22.06 million, not the $54.2 million in the broker's records. The broker admitted to fraud in December 2025. The Monitor reports that its reconciliation of the unsecured claims "has not been completed".
What Followed
- The professionals were paid more in ten weeks than the Fourth Report says appeared personal over five years. By April 5, 2024, ten weeks into the proceeding, $1.5 million of professional fees had been paid. The Fourth Report's "in excess of $1 million" covers 2019 to January 2024, a period in which the companies also paid $24.7 million in debt service to their lenders. Third Report of the Monitor (Apr 2024), s.6.0; Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.1 para 3 and s.2.5 para 1
- The $12.1 million reported so far is about three times what it would have cost to finish the homes. The DIP agreement set aside about $4.1 million to complete the renovations. The reported payments to professionals and DIP lenders are also about twice the roughly $6 million that the Fourth Report shows going to the principals, net, over five years, most of which the companies' evidence identifies as business expense reimbursement. And $12.1 million is only the amount disclosed. Fifteenth Report of the Monitor (Jul 21, 2026), s.9.0; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 33, note 2; Exhibit O, item A.1
- In April and May 2024 the Monitor and its counsel billed $1.58 million: more than the $1 million of expenses the Fourth Report describes as personal. The Core Sale alone left $11.6 million for the sellers after the lenders were repaid, more than eleven times that figure. By May 31, 2024 fees totalled $2.77 million. No filing separates the cost of the investigation. The $1 million, in context. Sixth Report of the Monitor (Jul 24, 2024), s.7.0; Third Report of the Monitor (Apr 2024), s.9.0; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O, item A.12
- By June 20, 2024 the companies had received $748,502.86 of the loan for renovations, against a plan of about $4.1 million. Every payment required the Monitor's prior consent. The first release was $65,000. The companies' sworn evidence is that all remaining units could have been finished by the end of August 2024. Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit paras 18(d), 33 and 34
- The companies entered the proceeding with term sheets of about $70 million and about $89 million against $90.1 million of mortgage debt. It ended in liquidation. Eighty-two per cent of the portfolio passed to the secured lenders by credit bid. The Monitor estimates that about $800,000 will be available for unsecured creditors. Affidavit of Robert Clark sworn Mar 27, 2024, para 14; Thirteenth Report of the Monitor (Jul 21, 2025), s.3.1; Fifteenth Report of the Monitor (Jul 21, 2026), s.5.0
- About $3.8 million of the Core Sale price was held back by the buyer and never paid. The buyer held back 5 per cent of the $75.85 million price for twelve months. The Monitor reported in June 2024 that the holdback "was never paid". In 2025 it reported that it "does not have the resources or stakeholder support to pursue" the claim, and it assigned the claim to the replacement DIP lender with the court's approval on an unopposed motion. By July 2026, $10.09 million of professional fees had been paid from the Monitor's account. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 paras 1 and 2; Thirteenth Report of the Monitor (Jul 21, 2025), s.4 paras 3 to 7; Fifteenth Report of the Monitor (Jul 21, 2026), s.9.0
- The $12.1 million is a floor, and the rent has never been accounted for publicly. Rent was about $500,000 a month at filing. The Monitor's cash table does not reflect activity in the companies' own bank accounts. It reports $3.49 million of "other receipts" over two and a half years, which it says include "rent collections and interest income", and no report states the total rent collected or how it was spent. Fifteenth Report of the Monitor (Jul 21, 2026), s.9.0; Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.3 para 3
The $12.1M is a floor, not the cost of the proceeding. It is $10.09M of professional fees and $1.99M of DIP lender interest and fees paid from the Monitor's trust account to July 2, 2026. The table is unaudited, does not reflect activity in the companies' own bank accounts, gives no rent figure beyond $3.49 million of other receipts that it says include rent, and does not itemize sale commissions, the replacement property manager's fees or the $4.9M shown as "Other". The DIP agreement contemplated about $4.1M of renovations. On the companies' sworn evidence $748,502.86 had been provided for renovations by June 20, 2024, after which the Monitor stated it would approve no further renovation costs. Even the Monitor's broader line for all advances to the companies, which it says were largely used for renovations, utilities, repairs and maintenance, is $1.4M: about one third of the renovation plan and under one eighth of the amount paid to professionals and DIP lenders. Ratios are this site's arithmetic.
Source: Fifteenth Report of the Monitor (Jul 21, 2026), s.9.0; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 33 and note 2; Fifth Report of the Monitor (Jun 17, 2024), Appendix D, note 4
Money in and money out of the Monitor's account, January 2024 to July 2, 2026
| Money in | Money out |
|---|---|
| DIP loans: $19.40M Payments from lenders on the credit bids: $13.10M Net proceeds of homes sold: $9.41M Other receipts, which the Monitor says include rent and interest: $3.49M Total: $45.40M |
DIP loans repaid: $19.30M Professional fees: $10.09M "Other", with no amounts given (property management fees, escrow distributions, utilities, HST, bank charges, sundry): $4.88M Property taxes: $3.48M DIP costs and interest: $1.99M Advances to the companies' accounts: $1.42M Insurance: $0.51M Total: $41.66M, with $3.74M left in the account |
$0.75 million of a $4.1 million renovation budget. That is what had been provided for renovations by June 20, 2024, on the companies' sworn evidence. The Monitor then stated that it "does not intend approving any additional renovation costs". Its own table of where $45.4 million went does not report a renovation figure. The Monitor had told the court that finishing the vacant units would add about $5 million a year in operating cash flow. For every dollar that reached renovations, more than thirteen went to professional fees.
These are the Monitor's own unaudited figures, as it reported them, for its trust account. The Monitor states that activity in the companies' own bank accounts "is not reflected in the table", and that since it took control of those accounts in June 2024 activity has been processed through its trust account. The professional fees line covers the companies' counsel, the Monitor and its counsel, the DIP lenders' counsel, counsel for the secured and unsecured lenders, and the sale advisors. The table has no line for renovations and no line for rent. Rent was about $500,000 a month at filing. The Monitor states that the $3.49 million of "other receipts" includes "rent collections and interest income", without giving the rent figure, and no report states the total rent collected over the proceeding. The Monitor's forecast to January 31, 2027 shows the balance going out as about $3.0 million of distributions to mortgagees and a further $360,000 of professional fees, and it estimates that about $800,000 will be available for unsecured creditors with proven claims. The $10.09 million is not the whole professional cost of the proceeding. No report states what was paid before the filing or from the companies' own accounts, what each mortgage lender spent on its own lawyers, the commissions and closing costs taken off the sale proceeds before the "net" figure, or how the $10.09 million divides between firms beyond the Monitor and its counsel. These are listed in Numbers That Have Not Been Reported. Fifteenth Report of the Monitor (Jul 21, 2026), s.9.0, s.5.0 and Appendix F, notes 7 and 8; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 33; Fifth Report of the Monitor (Jun 17, 2024), Appendix D, note 4; Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.3 para 3
Cost of the CCAA · Renovations and rent · Numbers that have not been reported · Who reviews the fees
The coverage, article by article. CBC, February 2024 · The Globe and Mail, February 2024 · The Entrepreneur Tab, April 2024 · CBC, June 2024 · The Globe and Mail, July 2024 · The Globe and Mail, September 2024 · Questions and answers
What did the companies build before the filing?
At the first hearing the court recorded that the companies and their affiliates "are one of the largest holders of residential real estate in Ontario".
In May 2022 the companies sold 223 homes for $75,850,443. In each of its first three reports the Monitor said the companies were "acting in good faith and with due diligence".
Track record · Who raised the money · The June 2024 report in detail
Matters Adverse to the Companies
A summary of the record is of use only if it is complete. The following also appear in the filings.
- The Monitor's Fourth Report says that "it appears to the Monitor that the Principals diverted, misused or misappropriated funds". Its analysis shows $69.7M paid out from 2019 to January 2024, including $24.7M of debt service, $20.3M to related parties and $12.3M between the companies, and more than $1 million of expenses that "appear personal in nature". The companies dispute how those payments were characterized. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.1 para 3, s.2.4 para 6, s.2.5 para 1
- The court referred to "the very serious nature of the allegations" and recorded that the stakeholders, including all of the secured and unsecured lenders, "have lost all confidence in management of the Applicants". Endorsement of Justice Osborne (Jun 24, 2024), para 14; Endorsement of Justice Osborne (Jun 25, 2024), para 5
- On December 6, 2024 the court recorded the Monitor's conclusion that a $140M valuation of the portfolio put forward by the principals was "not credible", and approved the fees of the Monitor and its counsel to that date as "fair and reasonable". Endorsement of Justice Osborne (Dec 6, 2024), paras 10, 11 and 37
- The Fourth Report says Mr. Clark had an undocumented ownership interest in the companies and described himself as having the "final say", while holding no formal position with them. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.3 para 4, s.5.1 para 4
- The OSC settlement records that all of the five largest borrowers had missed, deferred, late or NSF payments in 2021 to 2023. Its facts are agreed for regulatory purposes only. The companies' position, citing the broker's own interview with the Monitor, is that they were generally current on all debt service through 2022, across about 390 first mortgages and 802 promissory notes. Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Exhibit O, items A.1, A.8 and B.11; OSC Settlement Agreement, Claire Drage et al. (Dec 16, 2025), paras 6 and 25
- In the same interview the broker said she was not privy to the vendors' lawyer's trust account, which received the full proceeds. Monitor's Document Brief to the Fourth Report, Vol. 5 (Jul 5, 2024), including the interview transcript of Claire Drage (May 8, 2024), Drage transcript q. 170
- The Monitor states that the companies "did not particularize" which promissory notes were repaid from the Core Sale and did not provide documents showing that the debt was discharged. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 para 7
- The Fourth Report states that investors were not told that borrowed funds were moved between the companies, and that second mortgages were registered on certain properties despite statutory declarations that none would be. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.4 paras 4 and 5
- In December 2024 the Court approved the activities of the Monitor described in its Seventh to Tenth Reports, including "performing the Investigation as set out in the 10th Report". Endorsement of Justice Osborne (Dec 6, 2024), para 36
- No letter of intent received in the 2024 sale process offered value above the debt owed. Fifth Report of the Monitor (Jun 17, 2024), s.3.0 para 2(b)