When Canada's largest movie production facility in Downtown Toronto fell upon dark times, A. Farber & Partners Inc. (operating as Farber Financial Group) was called in as Trustee in Bankruptcy by a major Canadian chartered bank to get the action rolling again.

The Toronto film industry generated approximately $500 million of direct production revenues at that time, of which this facility was responsible for approximately 25%. The film industry is an important source of tax revenue, jobs, profile and goodwill for the City of Toronto, which is ranked as the 3rd most important film production centre in North America (after Los Angeles and New York City).

The property comprised approximately 200,000 square feet of leasable space, on approximately nine acres of land. The majority of the facility was subject to short-term rental contracts (three to six months in duration), with only a few long-term leases. Since the existing leases only guaranteed a revenue stream for approximately three months, it was the Trustee's initial plan to administer the property and its leases while attempting to sell the property by tender within a relatively short time-frame.

The Trustee faced a number of challenges that made the administration and sale of the property extremely challenging, including:

• lack of cooperation and hostile competition from existing management;
• environmental concerns arising from prior and adjacent property usage and sub-surface conditions;
• building and fire code deficiencies that had to be remedied in short order;
• substantial realty tax arrears; and,
• inherited problems relating to the major long-term tenant.

As a result of the issues highlighted above, the initial tender process did not yield any meaningful offers. The Trustee quickly identified that the business could be operated profitably and embraced the challenge of rebuilding the business and managing the facility as a viable film production facility.

The Trustee successfully and profitably operated the facility for approximately three years, during which time many of the major issues were resolved, paving the way for an eventual sale of the property. Under its current ownership, the facility continues to thrive as one of Canada's premier movie production studios.

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