The Core Sale and the $11.08M
In May 2022 the companies sold 223 homes for $75,850,443. Two years later the Monitor's report said $11.08M of the proceeds appeared to have gone to the companies. The companies' sworn evidence is that the money repaid promissory notes, paid through The Lion's Share Group. No court has decided the point.
The sequence, from the filings
- May 2022The companies sell 223 homes to Core for $75,850,443, subject to a 5% holdback.Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 para 1
- June 10, 2024The companies write to the Monitor. As reproduced in the Monitor's own report, the letter says the amounts were payouts of the promissory notes on the properties sold, that "these are not promissory notes that were issued to" the principals, that "the vendors' real estate counsel was instructed to pay this amount to The Lion's Share Group Inc.", and that the companies "may have materially overpaid The Lion's Share Group Inc. at the time of the Core Sale closing". The letter enclosed the payout instruction and the cheques provided by the vendors' counsel.Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 para 6
- June 11, 2024The Monitor files its report. It says $11,082,375.97 "appears to have been paid to the Applicants in the form of promissory notes". It adds that the companies did not identify which notes were paid or document a discharge of the debt, and that the Monitor "is unable to prepare" a proper accounting of the sale proceeds. The Monitor had not discussed its findings with the companies.Fourth Report of the Monitor, redacted (Jun 11, 2024), s.3.0 para 9, s.4.5 paras 5, 7 and 9
- June 12, 2024The companies' counsel writes that the companies "vigorously dispute the Monitor's findings".Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 63, Exhibit J
- June 13, 2024The Monitor's counsel replies that the report "accurately reflects the facts".Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 65, Exhibit K
- June 19, 2024The companies send a letter identifying more than 30 issues and ask for a revised report.Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 70, Exhibit O
- June 20, 2024Sworn evidence is filed: "No such funds were paid to the Applicants or their principals in the form of promissory notes." It adds that the Monitor "has ignored the only explanation provided to it for the $11,082,375.97 in payments".Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 72(c)(ii)
- June 23, 2024The Monitor files a supplement. It records that a draft of the Fourth Report "was not provided to any party (including the Applicants) prior to it being filed with the Court". It acknowledges additional materials and clarifications and says they "do not change the principal conclusions" of the report.Supplement to the Fifth Report (Jun 23, 2024), s.2.0 paras 1 and 2
- June 24 and 25, 2024The court holds that the companies are entitled to cross-examine. The motions are then resolved on consent without a contested hearing. No approval of the Fourth Report is sought, and a consent order ends the companies' obligation to respond to investigation requests.Endorsement of Justice Osborne (Jun 24, 2024), para 13; Endorsement of Justice Osborne (Jun 25, 2024), paras 2 and 8; Ancillary Order, Jun 25, 2024, para 6
- December 2025Claire Drage, whose company The Lion's Share Group held about 602 of the companies' roughly 802 promissory notes, admits to fraud before the Ontario Securities Commission.
The two positions
The total disbursed from the Core Sale "to the Applicants, Principals and non-Applicant related companies was $22,682,895.92", of which $11,082,375.97 "appears to have been paid to the Applicants in the form of promissory notes".
The $22,682,895.92 is the trust ledger's line for "Disbursements Before Promissory Notes". The promissory notes were debt owed to the companies' unsecured lenders that was repaid on closing.
The affidavit states that Ms. Drage's evidence to the Monitor corroborated that the proceeds of the Core Sale were used to repay the relevant lenders, "in amounts that the Applicants believe to have been overstated by Windrose".
Asked by the Monitor's counsel on May 8, 2024 how the Core Sale proceeds were disbursed, the broker answered that she knew how they were disbursed "with regard to lenders that we brokered were paid back and Lion's Share being paid back". She said a lump sum was deposited to her firm's account and "we immediately disbursed every penny that was applicable to go direct to the lenders that it applied to".
She also said that she was not privy to the vendors' lawyer's trust account, and that some of her own firm's notes, on one company only, were left unpaid with her agreement.
The payout amounts on the Core Sale were calculated by the broker's firm. Asked whether an analysis was done, she answered: "We did payout statements from the sale, so we knew exactly what was owed."
The companies' sworn evidence is that the lenders were repaid "in amounts that the Applicants believe to have been overstated by Windrose". Their reconciliation puts the unsecured debt at about $22.06 million, against $54.2 million in the records supplied by the broker. She admitted to fraud in December 2025. No reconciliation of what was actually owed at the time of the sale has been published.
What the report did not trace
"In almost all cases, real estate was purchased with funds directed by Windrose to law firms", so those funds never passed through the companies' bank accounts. "Due to the significant cost of this element of the Investigation and lack of adequate supporting documentation, the Monitor did not trace funds directed from Windrose to the Applicants' real estate lawyers."
The Monitor "makes no findings in respect of those unknown transactions or funds that did not flow through the Applicants' bank accounts". Other than interviewing Ms. Drage, it "performed limited investigative activities concerning Lion's Share and related parties as it was outside the scope of the Investigation".
The report's larger figures
Of $69.7M paid out from 2019 to the filing, the largest category was debt service at $24.7M. The report shows $20.3M paid to related parties and $12.3M moved between the companies. Net of amounts received back, it puts payments to related parties at $13.4M, including $1.8M to SID Renos and $0.7M to SID Management, the group's renovation and property management companies.
The report says more than $1 million of expenses "appear personal in nature". On purchases on the principals' credit cards at Home Depot, similar suppliers and contractors, it says these "may be legitimate business expenses" but that the lack of records "has made it virtually impossible for the Monitor to determine with any degree of certainty" whether they were.
Business expense reimbursements account for about $4.4M of about $6M in net disbursements to the principals, a practice that continued under the Monitor's oversight without objection. About $81.5M of first mortgage loans went directly to lawyers' trust accounts to buy the properties, about $16.8M of note proceeds was used for closing costs and other payments, and about $13.6M has been spent on renovations. The promissory notes contained no covenants restricting the use of funds.
By May 31, 2024, eleven days before the report, the fees of the Monitor and its counsel had reached $2,773,557. In July 2024 the court noted the Monitor's advice that, because the investigation had concluded, it expected the pace of fees to fall. No filing separates the cost of the investigation.
- The Monitor says the companies "did not particularize" which notes were paid off and did not provide "any documentation showing a discharge of the unsecured debt". Fourth Report of the Monitor, redacted (Jun 11, 2024), s.4.5 para 7
- The Monitor says the companies did not respond to its "multiple requests" to identify which credit card expenses were business expenses. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.5.2 para 6
- The Monitor says "tens of millions of dollars of receipts and disbursements were not recorded in the general ledgers". Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.3 para 1
- The OSC settlement records that the largest borrower sold a large part of its portfolio in a sale that closed in May 2022, and refers to a holdback in connection with amounts owed to Lion's Share. OSC Settlement Agreement, Claire Drage et al. (Dec 16, 2025), para 25(iv)
No court has made a finding on what the $11.08M paid for.