Published Claims, Checked Against the Court Record
In 2024 several outlets reported on the CCAA proceeding of Balboa Inc. and related companies, the SID companies led by Robert (Robby) Clark. Much of that coverage drew on the Monitor's Fourth Report of June 11, 2024. Below are published statements, each set beside the court record, quoted word for word so that a reader can check both.
Court
No court approved or ruled on the Fourth Report's findings. On June 24, 2024 the court referred to "the very serious nature of the allegations" and held that the companies were entitled to test the report by cross-examination. The next day it recorded that "no approval is sought at this time with respect to the Fourth Report or the activities summarized therein". The Globe and Mail's feature of July 27, 2024 states that none of the allegations of wrongdoing "have been proven in court".
Monitor's report
The Fourth Report's financial schedules are unaudited and set out the Monitor's view. The companies answered the report in a letter of June 19, 2024. The Monitor said that the letter and the companies' motion record "do not change the principal conclusions reached in the Monitor's Fourth Report".
Fourth Report of the Monitor, redacted (Jun 11, 2024), s.3.0 para 3; Supplement to the Fifth Report (Jun 23, 2024), s.2.0 para 2
What was published, and what the record shows
| What was published | What the record shows |
|---|---|
| The companies were described as "going bankrupt" and as having "bankruptcy protection".The Entrepreneur Tab, Apr 4, 2024; CBC News, Jun 14, 2024, subheading | The property companies applied for protection under the Companies' Creditors Arrangement Act on January 23, 2024. A CCAA proceeding is a court-supervised restructuring, not a bankruptcy. The Fourth Report itself refers to the "CCAA filing date (January 23, 2024)".Endorsement of Justice Kimmel, Jan 23, 2024; Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.5 para 1 |
| A lawyer is quoted: "Right from the beginning, the value of the mortgages was more than the value in the portfolio."The Globe and Mail, Sep 25, 2024, quoting Geoff Rabideau | The Monitor's own pre-filing report of January 2024 put the estimated appraised value of the homes at about $173 million, based on appraisals of about 30 per cent of them, against about $90.1 million of mortgages.Pre-Filing Report of the Proposed Monitor (Jan 2024), s.2.0 paras 3 to 4; Third Report of the Monitor (Apr 2024), s.2.0 |
| "As their real estate business was failing", the landlords spent millions on expenses "ranging from renting a luxury vacation home in Hawaii".CBC News, Jun 14, 2024, opening sentence | The Fourth Report dates the Hawaii payments: "On April 4, 2022 and April 7, 2022, the Applicants made payments totaling $92,033.11". That is a month before the companies closed the sale of 223 homes for $75,850,443. The same report dates the depletion of the sale proceeds to "on or around November 2022", about seven months after the payments, and calls transfers "particularly unjustifiable as of the fall of 2022". It records the companies' statement that promotional material was filmed on the trips, and says no copy was provided to the Monitor.Fourth Report of the Monitor, redacted (Jun 11, 2024), s.5.3.5 para 4, s.4.5 para 1, s.5.3.2 para 9 and s.7.0 para 8 |
| The landlords "transferred over $21 million to their personal bank accounts, credit cards and unrelated corporations".CBC News, Jun 14, 2024, attributing the figure to the Monitor | The Monitor's table of related party transfers, which is unaudited, shows $20,287,708 paid out to related parties, $6,861,071 received back from them, and a net figure of $13,426,637. The gross figure is about $20.3 million, and about a third of it came back. The article gives a gross figure without the money that came back.Fourth Report of the Monitor, redacted (Jun 11, 2024), Appendix 1 and Appendix 2 |
| "The landlords flaunted a lavish lifestyle throughout 2022."CBC News, Jun 14, 2024 | The Monitor's unaudited statement of the companies' disbursements from March 2019 to January 2024 shows $679,163 for "Retail, Travel, and Meals & Entertainment" out of total disbursements of $69,735,563. That category is about 1 per cent of disbursements over five years. The report's conclusion states: "The funds that were used to purchase and renovate the Applicants' properties do not appear to have been used for an improper purpose." The same conclusion says payments for luxury travel "appear unrelated and detrimental to the Business". "Flaunted" is the outlet's word, not a finding in the record.Fourth Report of the Monitor, redacted (Jun 11, 2024), Appendix 1, s.7.0 paras 2 and 4 |
| Unsecured lenders "are sitting on $54-million of virtually worthless personal guarantees".The Globe and Mail, Sep 25, 2024 | $54.2 million is the total of the companies' unsecured promissory notes at filing, not a total of personal guarantees. The Monitor later described that figure as "the amount initially provided by Ms. Drage", the broker, and its June 2024 report records that the companies "have asserted that the amounts owed to unsecured promissory noteholders is significantly less than the $54.2 million". The companies' own reconciliation puts it at about $22.06 million.Fourth Report of the Monitor, redacted (Jun 11, 2024), s.1.0 para 4, note 2; Eleventh Report of the Monitor (Feb 20, 2025), s.2 para 3; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 21(h) |
Also in the record
Statements in the same report that the coverage did not lead with
- "The funds that were used to purchase and renovate the Applicants' properties do not appear to have been used for an improper purpose." Fourth Report of the Monitor, redacted (Jun 11, 2024), s.7.0 para 2
- "The Monitor accepts that some payments to the Principals may have been justified as reimbursement for the Principals' use of personal credit cards to make bona fide business purchases for the Applicants." Fourth Report of the Monitor, redacted (Jun 11, 2024), s.7.0 para 3
- On the one corporate credit card, "the majority of the expenses incurred appear to be business-related expenses", the Monitor adding "albeit potentially on behalf of non-Applicant companies". Fourth Report of the Monitor, redacted (Jun 11, 2024), s.5.5 para 2
What was reported, and what the record shows · The $1 million, in context · The June 2024 report · Questions and answers · Sources
What cuts the other way
- The Fourth Report says it appears the principals "diverted, misused or misappropriated" funds, and sets out the transactions it relies on. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.4 para 6
- The Monitor's report describes the companies' books and records as incomplete and says many transactions could not be traced. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.3
- The Monitor's report says the companies did not provide it with a copy of the promotional material they said was filmed on the trips. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.5.3.5 para 4