- What The One co-owner Jenny Coco’s company Coco International filed an objection to the $1.2bn minimum bid price laid out by the receiver
- Why The company alleges the high price was set to intentionally block a sale
- What next JLL has been selected to market the building
Days after a $1.2bn minimum bid price was proposed for embattled Toronto skyscraper The One, one of the project’s owners is alleging that the sales process is intentionally “designed to fail.”
Coco International, headed by 50% owner of The One, Jenny Coco, filed an objection to the receivership-induced sales process laid out by receiver Alvarez and Marsal — the latest update for the project, under construction at 1 Bloor Street West. Coco International argues that by setting such a high bid minimum, the senior lenders on the project are ensuring that “no qualified bids will be received.”
“If a purchaser must pay $1.2 billion or more to buy the Project and must also invest a further, say, $700 million for example, to complete construction, it will have invested $1.9 billion into the Project,” Coco International stated in the objection. “No purchaser will do this unless the Project will yield revenues of at least that amount. It is a certainty under any model or forecast that the Project revenues will not match this amount.”
The bid floor was decided upon by the senior lenders, Coco International said, which are collectively owed more than $1.5bn. Coco International is a subordinate lender on the project and is owed $183m.
The receiver’s report suggests that if no qualified bids are received during the sales process, the senior lenders will oversee the 91-storey tower to completion. They would then recoup funds from the sale of condominiums and rent income from the commercial spaces. Coco International says this effectively will allow the senior lenders to own The One without having to actually purchase it.
Alvarez and Marsal responded, saying the claims are “entirely without merit.” The receiver went on to allege Coco International has an ulterior motive for objecting: limiting the liability of Jenny Coco, who provided personal guarantees for all amounts owed to the senior lenders.
“The Receiver has carefully considered the concerns about the SISP raised by the Coco Parties’ in their Notice of Objection, and has determined that they do not warrant any change to the proposed form of SISP,” the receiver wrote.
Jenny Coco is the CEO of the Coco Group, which also includes Coco Paving Inc., a road paving company founded by her father. She is perhaps more well known as a co-owner of Bridging Finance, a private lender that was placed in receivership in 2021 amid an estimated $1.3bn in losses for investors. The RCMP launched a criminal investigation into Bridging Finance in 2022, though no charges have been laid.
In their response, Alvarez and Marsal noted that Coco International’s objection seems to ignore the fact that bidders can alternatively submit a development proposal, which does not have to include an acquisition element and is therefore not subject to the bid minimum.
The sales process and the selection of a brokerage — JLL — were ultimately approved by the court.