Securities Law & Instruments


Headnote

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications – issuer deemed to no longer be a reporting issuer under applicable securities legislation – issuer is a limited partnership that was established for a fixed period – issuer is in the process of winding up – issuer has ceased all commercial activity and will be dissolved after the liquidation process is complete – issuer will distribute to its unitholders all of its remaining assets – news release issued to notify unitholders of liquidation and dissolution – news release issued to notify unitholders of application to cease to be a reporting issuer and that issuer will no longer consent to transfers of its units – issuer has more than 50 securityholders worldwide and more than 15 securityholders in Canada.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).

November 17, 2017

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(the Jurisdiction)

AND

IN THE MATTER OF
THE PROCESS FOR CEASE TO BE
A REPORTING ISSUER APPLICATIONS

AND

IN THE MATTER OF
TIMBERCREEK U.S. MULTI-RESIDENTIAL OPPORTUNITY FUND #1
(the Filer)

ORDER

Background

The principal regulator in the Jurisdiction has received an application (the Application) from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).

Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):

(a)           the Ontario Securities Commission (the OSC) is the principal regulator for this application, and

(b)           the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.

Representations

This order is based on the following facts represented by the Filer:

1.             The Filer is a limited partnership governed by the laws of the Province of Ontario that was formed on August 30, 2012.

2.             The Filer is governed by an amended and restated limited partnership agreement dated October 25, 2012 (the Partnership Agreement).

3.             The Filer is a reporting issuer in each of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut (the Jurisdictions).

4.             The Filer is not in default of securities legislation in any of the Jurisdictions.

5.             The Filer’s head office and registered office is 25 Price St., Toronto, ON, M4W 1Z1.

6.             The interests in the Filer consist of three classes of units, described and designated as “Class A Units”, “Class B Units” and “Class C Units”.

7.             CST Trust Company (CST) is the registrar and transfer agent of the Filer.

8.             CST has advised the Filer that there are currently an aggregate of 3,345,096 Class A Units outstanding held by 767 Unitholders, 66,500 Class B Units outstanding held by 22 Unitholders and 2,736,275 Class C Units outstanding held by 55 Unitholders.

9.             The Filer has never been an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.

10.          The Filer’s securities have never been traded in Canada or another country on a marketplace or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.

11.          Pursuant to Section 2.6 of the Partnership Agreement, the Filer is to be dissolved and terminated promptly following the final sale of its portfolio assets and the distribution of funds in connection therewith.

12.          On March 13, 2017, the Filer announced that, having completed the disposition of all portfolio assets and having paid out a special distribution to its unitholders (Unitholders) in connection therewith, the manager of the Filer would initiate the process required to wind-up (the Wind-up) the Filer, which may include a modest final distribution of any cash that remains in the Filer upon completion of the Wind-up process. The Wind-up process was commenced by the manager of the Filer shortly thereafter.

13.          On October 17, 2017, the Filer issued a news release advising its unitholders (i) of its intention to file the Application on or about the date hereof, (ii) of the anticipated date of the final distribution, if any, and the Wind-up, (iii) of the reasons for the Application, and (iv) that, in connection with the Application, the Filer has agreed with the OSC that it will no longer consent to transfers of its securities.

14.          The Filer has provided an undertaking to the securities regulatory authority or regulator in each of the Jurisdictions that:

(a)           as soon as practicable following the decision that the Filer is no longer a reporting issuer, it will issue a news release advising Unitholders:

(i)            that it has ceased to be a reporting issuer; and

(ii)           of details regarding the anticipated date of the final distribution, if any, and the Wind-up;

(b)           if it has not dissolved on or before June 30, 2018, it will, on or about that date and thereafter on a quarterly basis until the Wind-up, issue a news release updating Unitholders on the anticipated date of the final distribution, if any, and the Wind-up;

(c)           as soon as practicable after the time of the Wind-up, the Filer will issue a news release confirming the Wind-up; and

(d)           the Filer will notify the securities regulatory authority or regulator in each of the Jurisdictions at any time before its dissolution if:

(i)            it commences an active business or any commercial operations;

(ii)           it proposes to undertake a public or private offering of securities in any jurisdiction; or

(iii)          its term is extended by special resolution of its Unitholders in accordance with Section 2.6 of the Partnership Agreement.

15.          The Filer’s sole material asset consists of a potential tax refund from the Internal Revenue Service of the United States to which the Filer and its taxation advisors have reasonably determined that the Filer is entitled, and which refund shall be for the benefit of the Filer’s Unitholders upon receipt thereof.

16.          The Filer has ceased carrying on business other than for the purpose of effecting the Wind-up. Once determined, any final distribution to Unitholders will be effected in accordance with the terms of the Partnership Agreement, the Wind-up will be completed, and the Filer will be terminated.

17.          Pursuant to Section 7.2 of the Partnership Agreement, the Filer is restricted from raising capital or from making any further investments.

18.          Pursuant to Section 8.9 of the Partnership Agreement, Unitholders may not sell, transfer or assign their units without the prior written consent of the Filer’s general partner, which consent may not be unreasonably withheld, unless any such sale, transfer or other disposition is to one of their wholly-owned affiliates that remains wholly-owned by the applicable Unitholder for the term of the Partnership Agreement. The Filer has agreed with the OSC that it will no longer consent to transfers of its securities.

19.          The Filer does not expect that there will be any activities of the Filer that will require the approval of the Unitholders, which would necessitate continuous disclosure to obtain such approval.

20.          The Filer, upon the granting of the Order Sought, will no longer be a reporting issuer in any jurisdiction in Canada.

Order

The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.

The decision of the principal regulator under the Legislation is that the Order Sought is granted.

“Deborah Leckman”
Commissioner
Ontario Securities Commission
“Mark J. Sandler”
Commissioner
Ontario Securities Commission