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Recent news from CHF Canada
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York Region moves to seize Thornhill Green Co-op assets
MAY 27, 2008 In a surprising and unprecedented move, York Region is going to court to try to force the sale of the assets of Thornhill Green Co-op to its housing company, Housing York. In its court submission, the Region proposes to buy the assets at less than half of the market value. The hearing is scheduled for May 29.
Thornhill Green is a 101-unit co-op built in 1966 and converted to co-op ownership in 1991. The service manager put the co-op into receivership two years ago because of concerns it had about the co op’s governance and finances – an action that CHF Canada does not believe was necessary or justified. Now, with the legal action to sell the co-op units, York Region has taken the final step in its efforts to close down the co-op. The pretext used is that the townhouses need extensive repair and the co-op doesn’t have enough money on hand to pay for the work.
CHF Canada is joining with Thornhill Green to fight back. Both parties have hired Murray Klippenstein to represent them in court on May 29. Mr. Klippenstein was CHF Canada’s lawyer in its successful legal action to block Bridlewood Co-op from selling its units to its members.
Throughout the receivership, the service manager has assured the board and members that, once its concerns were addressed, member control of the co-op would be restored. Instead, with no advance warning and on the Friday before a long weekend, the co-op received notice that, in less than two weeks, the courts would be asked to approve the sale and municipal takeover of the co-op. “The secrecy on the part of the service manager and the hurried legal action were clearly designed to catch the co-op off guard and leave it little chance of defending itself,” says Dale Reagan, Managing Director of CHF Canada’s Ontario Region.
“York Region’s action violates every principle of natural justice,” says Reagan. “The co-op has a right to defend itself and the service manager has a duty to ensure that it is in a position to do so.”
Reagan acknowledges that the co-op has had some problems that need to be addressed but points out that York Region has many remedies available to it that would leave Thornhill Green as a co-op. “When we learned of York Region’s plans we tried to persuade them to work with us on alternative ways of addressing their concerns but they had no interest in even exploring the possibilities,” says Reagan. He adds that the underlying financial position of the co-op is very strong. “They have millions of dollars in equity, receive no operating subsidy from the Region and pay for much of the RGI subsidies out of their own revenues. There is no question that they can easily deal with the financial issues they are facing.”
Co-op members are very worried, angry and highly motivated to fight this. They have set up a website, contacted local politicians and reached out to supporters in the local community. Busloads of co-op and community members will be at the court hearing on May 29. The story has also begun to attract considerable media interest.
“The case is of fundamental importance to co-op housing,” says Reagan. “If York Region succeeds it will be a very damaging precedent, opening the door to the forced takeover of other co-ops by service managers wanting to expand their housing companies.”
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