Westbank, one of Vancouver’s largest and most prominent real estate development firms, is in “a financially precarious position” and has laid off nearly half of its workforce, according to one of its former senior employees.

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The allegation about layoffs was made in a sworn statement recently filed in B.C. Supreme Court as part of a continuing breach-of-contract claim by a former manager at Westbank.

Major Vancouver real estate developer in ‘financially precarious position,’ former senior employee claims in court filings Back to video

Asked about alleged staff reductions Friday, the company wouldn’t confirm anything.

“We cannot comment on matters before the courts, but we would note that none of these claims have been proven,” said Westbank spokesperson Ariele Peterson.

Westbank was behind several of Vancouver’s biggest and flashiest buildings over the last three decades before expanding to other markets, including Toronto, the U.S. and Japan. However, in recent years, the developer has been selling off assets and facing lawsuits over allegations of unpaid bills.

Just this week, news broke that a nearly completed Westbank rental tower in east Vancouver has been placed in receivership, after a court application by an Ontario pension fund seeking to recoup $109 million in debt.

As Postmedia News reported in February, the breach-of-contract claim was made by former Westbank employee Rhiannon Mabberley. She alleges the company owes her $1.2 million based on an employment agreement, but Westbank has responded in court claiming that payment was dependent on profits that never materialized on the projects she worked on.

None of her claims have been proven in court.

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In recent weeks, lawyers for both parties have filed a series of documents in court as Westbank seeks to set aside pretrial garnishing orders, which allow a creditor to get a debtor’s money from a third party, like a bank.

Mabberley obtained pretrial garnishing orders for Westbank’s corporate bank accounts seeking to have $1.2 million placed in trust with the court before an October trial.

But in an affidavit filed April 29, Mabberley wrote that the $1.2 million order only yielded $32,025.37, which “suggests to me that Westbank has changed its operating accounts to protect its assets from creditors such as myself.”

“I verily believe that Westbank is in a financially precarious position. For example, I am aware that Westbank has laid off nearly half of its workforce,” Mabberley wrote. In addition, she wrote, the company has “liquidated multiple real estate holdings to cover accumulated debts. I am also frequently contacted by suppliers with outstanding invoices to Westbank, inquiring about payment.”

Mabberley’s affidavit says her information is based on her 21 years of experience as a real estate development executive, her continued work as a consultant in the industry, and “information gleaned from my day-to-day work and interactions in that industry.”

Mabberley’s lawyer, Thomas Falcone, declined to comment.

Meanwhile, court-appointed receiver KSV Advisory issued a notice this week saying there is $286 million owed to 20 secured creditors and another $6 million to dozens of unsecured creditors related to Westbank’s 35-storey rental tower at 5083 Joyce St.

Westbank and the lender, the Ontario government employee pension fund OPTrust, said in a joint statement Friday that the two parties entered the receivership process on a co-operative basis.

OPTrust is the second-ranking lender on the project behind National Bank, which is owed about $165 million.

“The appointment of a court-supervised receiver has been sought to ensure the project can reach final completion in an orderly and timely fashion. This was undertaken co-operatively with Westbank and is consistent with shared objectives to facilitate the completion of the project,” said the statement from OPTrust and Westbank.

The Joyce receivership was first reported Thursday by real estate news website The Realist. The project is near completion, and leases have been executed with both commercial and residential tenants. Some units in the building are already occupied.

“Receivership establishes a court-supervised framework that provides independent oversight and keeps the project on track while remaining work is completed,” the joint statement said. “Building operations and leasing continue, and residents are not impacted.”

OPTrust applied for the receivership in March and it was granted by the court on April 27.

The Joyce tower is Westbank’s only project currently in receivership, but there has been a recent rise in receiverships and real estate insolvencies across Canada as the industry faces challenging market conditions.

Last year, OPTrust bought out Westbank’s entire stake in Sen̓áḵw, the Squamish Nation’s multi-tower development in Kitsilano.

Layoffs have hit other major Vancouver real estate companies recently, including Wesgroup last year.

With files from Susan Lazaruk

dfumano@postmedia.com

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