The trustee overseeing the bankruptcy of My Mortgage Auction, a company once controlled by Victoria mortgage broker Greg Martel, had better book a large conference room for the first meeting of creditors.
With debts in excess of $226 million and a list of creditors that will include more than 1,200 investors, My Mortgage Auction’s demise is likely to draw plenty of attention from those with a financial stake in it.
Trustee PricewaterhouseCoopers, which had My Mortgage assigned into bankruptcy last week, has set the first meeting of creditors for July 26 in Vancouver.
The receiver has been digging for a month to find out what happened to more than $226 million investors sunk into Martel’s company My Mortgage Auction Corp. for short-term bridge loans for commercial and residential real estate deals. The money was to be repaid with high interest.
Many of the investors claim they have been waiting months for repayment.
While the receiver has found very little money or assets in the last month of investigation, it did find evidence Martel had recently made preferential interest payments to some investors.
That forced the trustee to act, as bankruptcy allows the trustee to review payments My Mortgage has already made to some investors and claw that money back for the estate.
The initial investigation suggests there will not be much money to be spread out among the creditors.
The full statement of property shows the trustee now has control of just $292,586 between funds that are being held by the court and cash on hand already recovered.
Filed documents suggest My Mortgage has no real estate, no bills of exchange or promissory notes and no one owes it any money.
Martel has not been cooperative with the trustee and has provided no detail about the bridge loans that would allow the trustee to seek repayment in order to gather money for investors.
The money the trustee does have is already spoken for. PricewaterhouseCoopers is owed $300,000 for its services so far, while Royal Bank and My Mortgage employees, which are both considered secured creditors, are claiming $20,200 and $40,000 respectively.
Pricewaterhouse is continuing to investigate Martel’s financial dealings along with his companies Shop Your Own Corp., Martel Investments, 2289548 Alberta Ltd., Shair Your Car, Snail Team One, Snail Team Six, G&G Discount Merchandise and Martel Capital.
It has moved to freeze bank accounts and assets Martel may have.
In order for creditors to vote at the creditors’ meeting, they must register a proof of claim with the trustee. Those claims would have to be proved before creditors can share in any proceeds from the estate.
The trustee will mail bankruptcy packages to all stakeholders — investors, employees and trade creditors — next week.
>>> To comment on this article, write a letter to the editor: [email protected]
