The chief financial officer for the embattled builder of the Murrayville House condos said there were “various streams” to the firm’s business when asked about company expenses that included thousands in luxury clothing and cosmetics.
Documents released by the Bowra Group, which is handling the receivership of the 92-unit condo project, show some of the spending from the bank accounts of 0981478 B.C. Ltd. (098).
That numbered company is part of the Newmark Group of companies controlled by developer Mark Chandler.
Of 098’s funds, $17.3 million was spent on development, $15.7 million was spent on related Newmark Group projects, and $845,000 was spent on “personal shareholder expenses,” according to a Bowra report to the courts.
A Bowra report filed in May said that financial documentation provided by Newmark “is not complete, has little or no backup information and is not reliable.”
A previous bookkeeper for Newmark said that when she worked for the firm up to mid-2016, Newmark owner Mark Chandler would withdraw cash from 098’s bank accounts and use a 098 debit card for personal expenses, according to Bowra’s report.
In 2015 and 2016, 098 was taking in money from “wholesale” buyers of its condos, who paid discounted rates for units, but put up their cash up front.
Newmark has insisted in court filing that these were loans, but some buyers expected to either take possession of the units, or to see them sold later at market prices, with the “wholesale” buyers being given the difference between the two prices.
Bowra’s latest report to the court said that $11.7 million was paid to 098 for “wholesale” units.
Bank records show money also flowed out of 098 on some days.
A single day’s transactions, on April 6, 2015, includes thousands of dollars of spending, withdrawals, and transfers.
On that day, there was a $65,000 transfer out of the account, and a $5,000 withdrawal, according to bank statements filed as part of an affidavit by J.P. Dhaliwal, the chief financial officer of Newmark.
April 6 also saw the following expenditures from the account:
• $1,250.17 at Kitchen Therapy
• $1,159.16 at Urban Outfitters, a clothing and lifestyle chain
• $1,912.96 at Aritzia, a women’s clothing store
• $553.28 at Aritzia
• $499.52 at Sephora, a cosmetics and beauty chain
• $50.97 at Claire’s, a jewelry and accessories store
• $530.58 at Trattoria, a restaurant in Park Royal mall in West Vancouver.
More money was spent that day at fast food restaurants and other small expenses.
The spending took place shortly after the start of promotion for Murrayville House condos.
The showhome for the condo development had opened in late March, and Chandler was promoting a contest in which people sent in photos showing what they loved about the Murrayville neighbourhood.
Dhaliwal said there were various streams to the firm’s project when asked about that spending.
“There’s more there than is being suggested by the counter parties,” Dhaliwal said.
“I’m not going to get into the details on that,” he said of matters that are currently in litigation.
Multiple creditors are suing 098 and have placed certificates of pending litigation (CPLs) on other Newmark properties, including a development property in Langley’s Carvolth area.
The CPLs are impeding the firm’s ability to finance developments, Dhaliwal said.
The firm’s Sagebrush Golf Course near Merritt is currently listed for sale for $8.1 million; Newmark bought the property in November 2015 and never opened it to players.
Dhaliwal said a lender has listed the property for sale.
“We’re contesting the listing,” he said.
Mark Chandler is also bringing an appeal of his extradition order to the United States to face a fraud charge in California in connection to a 2007 real estate development.
“We fully anticipate an amicable and satisfactory resolution to that matter,” Dhaliwal said.
Condos in long-delayed Murrayville House could finally go up for sale this summer. The project was finally finished late in 2017, just before it was placed into receivership.
A court hearing on July 3 is expected to determine whether the remaining contracts on 52 apartments in Murrayville House will be canceled.
A judge has already ruled that 40 contracts to purchase homes in the 92-unit project be canceled. The remaining contracts are so-called “wholesale” contracts.
If all the contracts are voided, the Bowra Group, which is shepherding the project through receivership, will sell the units.
With multiple creditors, including a group of “wholesale” buyers, suing the builders, the money from the sales likely won’t be paid out to anyone immediately, said Mario Mainella, a vice president with the Bowra Group.
The courts will determine where it eventually goes.
“That money may be held in trust for a while,” Mainella said.