Vancouver actual property developer accused of fraud by outdated mates

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They have been three mates who attended the celebrated St. George’s personal college in Vancouver within the early Nineties after which went on to distinguished careers: the CEO of an actual property improvement agency, the pinnacle of drugs at a serious hospital, and a provincial courtroom decide.

However now the decide and the physician allege in a lawsuit that they misplaced a whole bunch of hundreds of {dollars} after investing within the developer’s actual property tasks, accusing the CEO and his firms of fraud and misappropriation of funds.

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In the meantime, the developer, in keeping with courtroom filings, is hiding in an try to keep away from being served with the lawsuit.

The declare is certainly one of greater than 100 recordsdata within the B.C. Supreme Court docket civil registry naming Macario (Tobi) Reyes or his firm, Port Capital Improvement, together with different lawsuits and foreclosures actions involving varied properties, most filed in the previous few years.

Reyes has beforehand been described as a rising star in Vancouver’s improvement trade, showing in Canadian and worldwide media to debate his enterprise successes in addition to his philanthropic and community-building efforts.

The unique declare by Reyes’ former schoolmates was filed in August 2023, and the case is continuous. In a preliminary ruling in Might of this yr, a B.C. Supreme Court docket decide described it as “a complicated litigation which is in its relative infancy.” An amended model of the declare was filed final month.

Reyes has not responded in courtroom to the lawsuit.

However when Postmedia Information contacted him by e-mail this week, Reyes replied: “There have been hundreds of issues and we have settled them all except for a remaining handful or so. We intend to deal with this latest suit to the satisfaction of the law and the parties.

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“But bigger picture is that we will focus on continuing what we have done over 20 years: build homes, innovate in our space and add more value to the community,” Reyes mentioned. “I am extremely empathetic to how each side has felt while reserving details for our response. We hope to take all of these learnings and lessons and adapt them to a world where housing matters even more.”

Reyes, Dr. Gerald Da Roza, and Decide Derek Mah “met and became friends in high school,” the lawsuit says. A long time later, in 2012, Da Roza and Mah, via their respective holding firms, invested a mixed $400,000 in a mission Reyes’ firm was creating in east Vancouver with a mixture of industrial house and condos, the declare says.

The events entered right into a restricted partnership, with a plan to personal the industrial house after the event’s completion, the declare says. However Reyes obtained a second mortgage on the industrial house totalling $2 million from personal lenders, apparently with out Mah and Da Roza’s information, and the lawsuit alleges Reyes defrauded the traders by utilizing that cash for his personal “personal gain, either directly or through legal entities over which he had direct personal control.”

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The traders suffered losses, they allege, after the personal lenders behind the second mortgage initiated foreclosures proceedings in 2021 and took over possession of the industrial house.

Between their preliminary investments in 2012 and the Kingsway foreclosures in 2021, Mah and Da Roza’s firms additionally invested in three different Port tasks round Vancouver, the declare says.

Not one of the allegations have been confirmed in courtroom.

Da Roza, Mah and their legal professionals didn’t reply to requests for remark.

Port Capital’s monetary troubles grew to become public in mid-2020, when the corporate’s highest-profile mission — a glitzy downtown Vancouver rental tower known as Terrace Home that was heralded as one of many world’s tallest hybrid timber buildings — entered chapter safety partway via building. Following two years of contentious authorized battles, Solterra acquired the property in 2022.

Aside from Terrace Home, the destiny of Port’s different properties has to this point acquired little if any public consideration, however they’ve stored native insolvency legal professionals busy in recent times with a number of properties tied up in litigation and topic to dozens of foreclosures and court-ordered gross sales.

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Reyes’ firm, Port Capital Group, was divided into two divisions: an funding arm known as Port Dwelling Properties and a improvement arm known as Port Capital Improvement. At one time, the portfolio of Port Capital and associated firms included greater than 20 tasks between Vancouver, the Okanagan and Toronto, together with condos, motels, industrial and lightweight industrial actual property. Earlier than Port’s monetary troubles, its mixed portfolio was estimated within the a whole bunch of hundreds of thousands of {dollars}.

It isn’t clear which, if any, properties are nonetheless owned by Port and its associated firms after all the foreclosures.

Requested if he had any improvement tasks or different enterprise ventures within the works, Reyes mentioned: “Yes many, and will come to market as soon as this year with those projects.”

Reyes immigrated to Canada as a baby from the Philippines, the place his grandfather D.M. Consuji served as secretary of the Division of Public Works within the Seventies throughout Ferdinand Marcos’s rule. Consuji, a building magnate and actual property developer, was ranked by Forbes Journal as one of many Philippines’ wealthiest individuals, with an estimated web value of US$3.68 billion earlier than his loss of life in 2017.

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Reyes pointed to his grandfather as his position mannequin in a 2019 profile in The Manila Occasions, which described Port Dwelling as “one of Canada’s most progressive and successful property developers.”

Reyes has additionally been lively in the neighborhood, together with work with charities and the non-profit society working to construct a Filipino cultural centre in Vancouver.

A 2014 Business in Vancouver story described Reyes as a “rising star” in Vancouver actual property, and famous that longtime mates have been amongst his “top professional connections” and the corporate’s traders embrace individuals from St. George’s.

In his feedback to BIV a decade in the past, Reyes credited the help of his associates, together with lawyer Robert Quon, “with enabling his achievements.”

Quon is called as a co-defendant alongside Reyes within the traders’ persevering with lawsuit, recognized because the lawyer for the restricted partnership. The declare alleges that Quon didn’t act within the partnership’s greatest pursuits and engaged “in a conflict situation where Mr. Reyes and his multitude of legal vehicles were previous, prolific clients of Mr. Quon’s,” and he had beforehand invested in Reyes’ firms, which was not disclosed to Mah and Da Roza.

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In a response filed in courtroom, Quon has denied all allegations of wrongdoing and any breach of obligation.

Legislation Society of B.C. information present Quon has no disciplinary historical past, observe restrictions or present regulatory proceedings.

Reached by cellphone, Quon declined to debate the case and referred inquiries to his lawyer. His lawyer didn’t reply to messages.

Repeated fruitless makes an attempt over the past 11 months to serve Reyes with the lawsuit are described in affidavits filed in courtroom: the professionals who ship authorized paperwork visited his workplace and residence a number of instances, left printed notices and voice messages, and acquired no response.

“The process-servers believe that Mr. Reyes is aware of the documents and is evading service,” in keeping with an software filed in courtroom earlier this month by the plaintiffs’ legal professionals.

The plaintiff’s legal professionals utilized in early July for the courtroom’s permission to serve the motion “alternatively” upon Reyes, that means they will ship the paperwork to his workplace and residence and go away it with an grownup there or affix the paperwork to the door, and ship them by mail to each addresses.

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Earlier this month, a B.C. Supreme Court docket decide agreed, that means Reyes could have 21 days to reply in courtroom after the paperwork are delivered, even when he doesn’t obtain them in individual.

Requested in regards to the allegation he had been “evading service,” Reyes mentioned: “We have dealt with everything so I don’t know where that comes from.”

Relating to the longer term, Reyes mentioned: “We have a lot going on that we are extremely excited by.”

Reyes didn’t reply when requested if the three former schoolmates have been nonetheless mates.

dfumano@postmedia.com

twitter.com/fumano 

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