As his real estate empire showed signs of trouble, a promotional video featured a fully clothed Robby Clark standing on the bow of a yacht, arms raised to the sky, a camera circling above him.
“You can stick me in the desert with nothing, and I’m going to come out owning the desert,” Clark is heard saying at another point in the three-minute video.
In March 2022, it was posted on several Instagram accounts like “billonaireclassy” and shows how the former YTV child actor turned real estate investor lives a life of luxury.
He’s been shown getting into sports cars and relaxing on private jets, smiling alongside famous rappers like Kanye West and Rick Ross, and enjoying the view from his California mansion.
Maps of Sault Ste. Marie and Sudbury appear—among the communities in Ontario where he owned about 800 properties and housed thousands of tenants.
“I’ll own a billion dollars,” Clark says.
Also appearing are Clark’s business partners from the Hamilton area – Dylan Suitor, Ryan Molony and Aruba Butt.
In the video, Molony and Suitor dance with Clark in nightclubs, and Suitor and Clark take selfies on the sidelines of an NFL game. Butt and Clark stand side by side on a yacht, wearing designer clothes and raising their matching glasses to the camera.
“If you’re going to work with lenders, and we work with a lot of private lenders on acquisitions, they need to know that you know what you’re doing,” Clark says in the video.
But behind the scenes, Clark’s business, SID Developments and 11 related corporations owned by Molony, Suitor and Butt, took on millions of dollars in debt and struggled to keep up with payments to lenders, according to documents filed in the Ontario Superior Court of Justice.
Meanwhile, dilapidated properties remained vacant, and utility bills, property taxes and contractors remained unpaid.
By early 2024, the corporations had just $100,000 in the bank and owed $144 million to lenders, faced dozens of creditor lawsuits, and received court protection from bankruptcy.
Since CBC Hamilton reported on the court proceedings last week, Clark, Suitor, Molony and Butt have made many of their social media accounts private and have not responded to requests for comment.
But court documents and interviews with experts help explain how they became one of Ontario’s largest holders of residential real estate and are now on the verge of losing it all.
A Hamilton mortgage broker has arranged many loans
This is not the first time Clark has faced financial problems.
He lost the money he made playing as a kid because of a “lack of financial education,” Clark told YouTuber David Meltzer in a 2021 video.
Clark declared bankruptcy in 2009 and then started a meal kit business, which also failed, he said. He then turned to real estate investing, but his credit score was a “joke,” so he had to get “other people to sign on the dotted line” when buying his first properties.
In recent years, Clark’s firm, through Butt, Molony and Suitor, acquired, renovated and leased or sold more than 800 properties, mostly single-family homes, fueled by more than 1,300 loans, court documents say.
The vast majority came from Hamilton mortgage broker Claire Drage, according to the documents. Through her companies, Windrose Capital and The Lion’s Share Group, she attracted private lenders to invest in Butt’s, Molony’s and Suitor’s.
It provided their corporations with secured mortgage loans that give lenders insurance if borrowers default on their debt obligations, according to court documents. It also provided them with unsecured debentures – loans that are not tied to any collateral.
Drage did not respond to a request for comment, but said in a Facebook post last October that “our borrower eligibility criteria are strictly adhered to, ensuring good lending practices.”
In one case, it provided Suitor’s Interlude Corporation with $23 million in mortgages and another $29 million in promissory notes.
In another, she arranged $6.5 million in mortgages for Butt’s corporation, Joint Captain Real Estate. Her son Sam Drage and daughter-in-law Bronwyn Bullen are shareholders.
She then loaned them another $3 million in promissory notes.
Sam Drage and Bullen did not respond to requests for comment.
Toronto mortgage broker Ron Butler, who is not connected to the case, said the family ties are a conflict of interest that Drage should disclose to investors.
He described the huge number of loans arranged by Drage as “frightening” and said that while it was not illegal for mortgage brokers to issue riskier bonds, he believed it was inappropriate because it put lenders in “such a bad position” if something happens to them. an investment.
“I wouldn’t touch them with a 10-foot pole,” Butler said of the bonds.
When asked if it was investigating Drage, Ontario’s financial services regulator — which regulates mortgage brokers — said in a statement that it was “thoroughly looking into the related concerns.”
Many Homes Can’t Be Saved: Sault Ste. Marie the mayor
Despite generating “significant annual revenue” from rental income and the sale of certain properties, the corporations did not have enough cash to pay their debts, court documents say.
“I don’t feed [any capital] in accounts,” Clark said in a 2021 YouTube video.
By that fall, Clark had begun negotiations to sell about a quarter of its properties to another real estate investment and property management company, Core Developments, chief executive officer Corey Hawtin told CBC Hamilton.
The sale closed in May 2022, but Clark’s company continued to default on loans and was unable to find refinancing options, court documents say. But as interest rates rose and property values fell, Suitor, Molony and Butt continued to take on debt, court documents show.
Patty Vanminnen placed mortgages last year for Suitor to buy two houses in Sudbury, but was not informed of everything else going on, she said in a written statement as part of the bankruptcy proceedings.
“The suitor did not inform us that these mortgages were approved as part of a larger enterprise,” Vanminnen said, “or that hundreds of other lenders received mortgages as part of a larger enterprise, or that any of the alleged problems existed in that process. “
At the end of the six-month mortgage term, Interlude defaulted on the mortgages, she said.
Vanminnen moved to recover her money, and then Suitor, Molony and Butt filed for bankruptcy. The trio now have protection from lawsuits until at least mid-February.
In Sault Ste. Marie, a northern Ontario city of about 73,000 people, corporations own about 200 homes, or one percent of the housing stock, Mayor Matthew Shoemaker told CBC Hamilton. The impact was extremely negative.
“I would happily never deal with these companies again,” he said.
Nearly half of the homes they own in Sault Ste Marie are in an “irresolvable” state of disrepair and are vacant, Shoemaker said. They fought the city over property standards and fire code violations and owe $645,000 in unpaid taxes, court documents say.
“I think our community will be better off if the resources they have in Sault Ste. Marie ends up in the hands of other landlords, preferably local landlords,” Shoemaker said.
Hawtin, CEO of Core Developments, said his company is interested in buying more properties and limiting the number of tenants who move out.
While Core has a similar business model to SID Developments, owning 550 properties, it has “adequate debt-to-equity ratios,” Hawtin said.
Tenants could face eviction if the homes are sold to people who want to live in them, lenders want them vacated and a court orders it, or if legal proceedings drag on and SID Developments can’t afford to keep them in habitable state, Hawtin said.
“I really hope that tenants are not pushed out by this process,” he said.
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