Former GM property under preservation order
Bayshore Groups is being prohibited by court order from unloading the former General Motors property on Ontario Street due to an ongoing lawsuit.
In a decision released last week, Superior Court Judge Thomas McEwen ordered that Bayshore can’t sell, transfer, encumber or dispose of the properties at 282 and 285 Ontario St.
The order was at the request of Attar Metals Inc. of Mississauga, which launched a $15-million civil suit against Bayshore in May alleging the St. Catharines company hasn’t honoured a contract.
Attar’s motion for an order for the preservation of the Ontario Street properties and for an order for an accounting was heard in Toronto on Dec. 4.
Alan Attar of Attar Metals Inc. said in an email that the company is pleased with the order and that the matter is proceeding swiftly.
“We believe the order is fair and reasonable,” he wrote.
Bayshore lawyer Howard Manis said the order was made on consent of both parties and Bayshore was not opposed to it.
“We agreed to it because we have no interest in abandoning the property,” Manis said. “We have every interest in completing the property and cleaning it up.”
The two sides will be at a Toronto courthouse again today to discuss the issue of a certificate of pending litigation on the mortgages which Attar Metals is seeking and Bayshore opposes.
In the statement of claim filed in May against Bayshore Groups, Bayshore International, 2390541 and 2202180 Ontario Ltd. and principals Chiara and Robert Megna, Attar Metals said it entered into a contract with Bayshore in October 2014. It said the agreement gave Attar Metals 50 per cent of revenue generated from the sale of all metals at the former GM plant as well as all proceeds of sale from all other assets and real estate on site. In exchange for $2.6 million, Attar says it also acquired exclusive rights to market, sell and collect revenues from all metals.
But Attar says Bayshore “significantly decreased” the value of the property by mortgaging it twice — for $5 million and then $20 million — without asking Attar and uses the property for personal benefit by setting up headquarters there.
Attar also alleges Bayshore removed on-site assets and sold them at auction and is using the corporate accounts for unrelated projects, such as setting up a boxing gym and storing a boat. Attar said in its statement of claim it appears Bayshore has misdirected the money it contributed.
Bayshore’s statement of defence says Attar was supposed to pay an equal share of operational expenses, failed to do so and therefore the letter of understanding with Attar is void.
Bayshore’s position is any money paid by Attar to Bayshore has been forfeited and Attar is no longer entitled to benefits under the letter of understanding.
The company said the mortgages were necessary to fund ongoing operational expenses which Attar left Bayshore to pay for by itself and denied using the property for personal use.
It filed a counterclaim seeking damages from Attar.
As a result of the Dec. 4 motion, the judge ordered that Attar be allowed on the premises to review the status of the demolition and to continue collecting metals pursuant to the letter of understanding.
The judge also ordered that both parties provide “a fulsome and upto-date” accounting of records by Jan. 31.
Lawyers from both sides were ordered to work co-operatively to arrange examinations of Andy Attar, Chiara Megna and Robert Megna by Feb. 28.
In addition, the judge ordered the order prohibiting Bayshore from selling the property be registered on the title to the property.