Seven years after the fire — and with Ashcroft now in receivership — the insurance claim will be the subject of a civil trial scheduled to begin in October.
Court documents show the decline and fall of the Ashcroft Homes Group was hastened by an April 2018 fire at its large student residence then under construction in Little Italy.
The three-alarm fire began in an exterior garbage chute and climbed up the side of the 26-storey building on Champagne Avenue, causing extensive damage to 10 of its floors. Some interior units also had water and smoke damage.
The fire would lead to years of acrimony and conflict between Ashcroft and its insurance company, Northbridge General Insurance, about how to settle the damage claim.
The unresolved claim — the two sides were more than $21 million apart in their appraisals of the damage — ratcheted up the financial pressure on Ashcroft, which bore the cost of reconstruction on the 353-unit building known as Envie II. The company also suffered lost revenue due to the residence’s delayed opening.
The dispute led to two lawsuits, worth a total of $60 million, that were still not settled when Ashcroft was forced into receivership by its major lenders in January 2025.
Ashcroft claims the insurance company owes it $51 million for property damage and $9 million for business losses. Northbridge contests those amounts.
In an affidavit, filed in Ontario Superior Court in December 2024, Ashcroft founder David Choo said the company spent $1 million on the litigation and needed to spend another $1 million on a civil trial to settle the insurance dispute.
An interim receiver, KSV Restructuring Inc., now controls Ashcroft’s extensive real-estate portfolio, including the Envie I and Envie II student residences.
Evening Update
In a recent court filing, KSV Restructuring said it had reviewed the legal case against Northbridge with its lawyers and intended to proceed with it.
It means that seven years after the fire — and with Ashcroft now in receivership — the insurance claim will be the subject of a two-month civil trial scheduled to begin in October 2025.
That promises to finally settle what has proved to be an epic and costly insurance fight between Ashcroft and Northbridge.
One judge who was asked to intervene in the case described it as “a procedural shipwreck.”
“The cause of the dysfunctionality of the appraisal process is a joint and several fault, and everyone involved had a role to play in the procedural fiasco,” Ontario Superior Court Justice Paul Perell said in a March 2021 decision.
In that decision, Perell terminated the damage appraisal process, which had become hopelessly bogged down.
Triggered under the Insurance Act, the appraisal process is normally used to resolve disputes between parties in an insurance claim. The insurer and the insured both appoint an appraiser. The appraisers assess the damages and present their case to a mutually agreed upon umpire, who then decides which estimate is more appropriate.
It’s supposed to be a flexible, expeditious process, but Ashcroft and Northbridge could not agree on its most basic details, such as who was eligible to be an appraiser.
“The damage caused by the bungling and the associated animosity is beyond repairing,” Perell declared in ending the appraisal process and directing that the claim be settled through a civil lawsuit.
Ashcroft badly needed money from the still-unsettled insurance claim.
In an affidavit, filed as part of Ashcroft’s application for creditor protection, company founder David Choo said the firm developed “liquidity issues” in recent years due to rising interest rates and a decline in occupancy rates.
A majority of Ashcroft’s lenders subsequently told court they had lost faith in the company’s management and wanted it sent into receivership.
Robert Gartner, a senior account manager with EQ Bank, the senior mortgage holder for the Envie II development, said the bank was preparing to launch a receivership application for the property when it found out Ashcroft had won court-ordered creditor protection in December 2024.
The bank’s $24-million loan to Ashcroft had by then been in default for six months, Gartner said.
“(Ashcroft) have become hopelessly overextended and are now caught in a market downturn that is not expected to be short-lived,” Gartner said in his affidavit.
He also expressed concern that Ashcroft was “intermingling” revenues and expenses from its various business lines.
Founded in 1992, Ashcroft Homes developed 12 communities in Ottawa through four major brands: Ashcroft Homes developed residential units; Alavida Lifestyles built and operated retirement homes and seniors’ residences; Envie developed and operated student accommodation; and reStays operated luxury short-term rental units and hotels.
The development firm suffered a series of crises during the past year.
In June 2024, Ashcroft defaulted on a $6.5-million loan, which resulted in three Richmond Road condominium properties going into receivership. Then, in October 2024, Ashcroft lost control of its 200-acre Eastboro development, which was sent into receivership after the company defaulted on an $80-million loan with the Royal Bank of Canada.
