Just as his real estate empire was showing signs of trouble, a robed Robbie Clark appeared in a promotional video, standing on the bow of a yacht and throwing his arms in the air as cameras circled overhead.
“You can throw me in the desert with nothing, and I'm going to come out owning the desert,” Clark can be heard saying elsewhere in the three-minute video.
It was posted in March 2022 on multiple Instagram accounts, including “billonaireclassy,” and depicts the former YTV child actor turned real estate investor living a luxurious life.
He has been pictured riding in a sports car, relaxing on a private jet, smiling next to famous rappers like Kanye West and Rick Ross, and admiring the view from his California mansion.
Marie and Sudbury, a map of Sault Ste. They are one of several communities in Ontario where he owned an estimated 800 properties and was home to thousands of tenants.
“I'm going to own $1 billion in stock,” Clark said.
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Former YTV child actor Robbie Clark appears in this promotional video, posted to Instagram in March 2022, talking about his business success.
Clark's business partners from the Hamilton area, Dylan Suter, Ryan Moloney and Alva Butt, will also be featured.
In the video, Moloney and Suiter are seen dancing with Clark at a nightclub and taking selfies on the sideline of an NFL game. Batt and Clark stand side by side on a yacht, wearing designer robes and holding matching tumblers at the camera.
“Ultimately, if you're going to work with a financier, and we work on acquisitions with a lot of private financiers, they don't know what you're doing,” Clark said in the video. We need to let them know that we are there.”
But behind the scenes, Mr. Clark's business, SID Developments, and 11 related companies owned by Mr. Moloney, Mr. Souter and Mr. Butt have racked up millions of dollars in debt, according to documents filed in Ontario Superior Court. , said it was struggling to keep up payments to its lenders. of Justice.
Meanwhile, the dilapidated property remained vacant, with utilities, property taxes and contractor payments overdue.
By early 2024, both companies had just $100,000 in the bank, owed $144 million to lenders, faced dozens of lawsuits from creditors, and were forced to seek court-ordered bankruptcy protection. I was receiving it.
Since CBC Hamilton reported on the trial last week, Clark, Suiter, Moloney and Butt have made many of their social media accounts private and have not responded to requests for comment.
But court documents and interviews with experts help explain how they became one of Ontario's largest residential real estate holders and now are on the brink of losing everything.
Hamilton mortgage brokers arrange many loans
This is not the first time Clark has faced financial difficulties.
In a 2021 video, Clark told YouTuber David Meltzer that she lost the money she earned acting as a child due to a “lack of financial education.”
Clark declared bankruptcy in 2009 and then started a meal kit business, which also failed, he said. He then turned to real estate investing, but his credit score was “a joke” and he had to “get other people to sign on the dotted line” when buying his first property. .
According to court documents, Mr. Clark's company has acquired and renovated more than 800 properties, primarily single-family homes, in recent years through the Butt, Moloney and Souter entities, funded by more than 1,300 loans. , leased or sold.
Most of the money came from Hamilton mortgage broker Claire Drage, documents said. Through her own firm, her Windrose Capital, and her The Lion's Share Group, she enlisted private lenders to invest in the Butts, Moloney and Suiter companies.
According to court documents, she provided businesses with secured mortgages that provided security to the lender if the borrower defaulted on the debt. She also provided unsecured promissory notes, loans that are not tied to collateral.
Mr. Drudge did not respond to requests for comment, but said in a Facebook post last October that “our borrower eligibility criteria are rigorously followed to ensure sound lending practices.”
In one instance, she provided a suitor's company, Interlude, with a $23 million mortgage and an additional $29 million promissory note.
In another example, she arranged a $6.5 million mortgage for Butt's company, Joint Captain Real Estate. Her son Sam Drage and her daughter-in-law Bronwyn Bullen are shareholders.
She then lent them another $3 million in promissory notes.
Sam Drage and Bullen did not respond to requests for comment.
Toronto mortgage broker Ron Butler, who is not involved in the case, said the family relationship is a conflict of interest that Drudge must disclose to investors.
He described the sheer number of loans arranged by Drudge as “scary” and said that while it's not illegal for mortgage brokers to issue riskier promissory notes, there are risks if something happens to the lender. He said he believed this was inappropriate because it would put him in a “very bad position.” investment.
“I'm not going to touch it with a 10-foot pole,” Butler said of the promissory note.
Asked if it was investigating Drudge, the Ontario Financial Services Regulatory Authority, which governs mortgage brokers, said in a statement that it was “thoroughly investigating the related concerns.”
Many homes 'unsalvageable': Sault Ste.mayor marie
Court documents say the company did not have enough money to service its debts, even though it was generating “significant annual revenues” from rental income and the sale of some properties.
“I won't keep it. [any capital] account,” Clark said in a 2021 YouTube video.
By that fall, Clark had begun negotiations to sell about a quarter of its properties to Core Developments, another real estate investment and property management company, CEO Corey Hawtin told CBC Hamilton. .
The sale was completed in May 2022, but Clark's business continued to default on its loans and no refinance options were available, court documents state. But as interest rates rose and real estate values fell, Souter, Moloney and Butt continued to take on new debt, court documents show.
Patti Vanminen invested in mortgage loans for Souter to buy two homes in Sudbury last year, but was kept in the dark about everything else, she said in an affidavit as part of her bankruptcy protection proceedings. Stated.
“We were not informed by Suter that these mortgages were being granted as part of a larger operation,” Van Minen said, “or hundreds of other “We were not informed that the lender was being granted mortgages as part of a larger operation or that any problems had been flagged.” What is being alleged in this lawsuit did exist. ”
At the end of the six-month mortgage period, Interlude became delinquent on the mortgage, she said.
Van Minen moved to get his money back, but then Sweetle, Moloney and Butt filed for bankruptcy protection. The three are currently protected from lawsuits until at least mid-February.
In the northern Ontario city of about 73,000 people in Sault Ste., companies own about 200 units, or 1 per cent of the housing stock, Mayor Matthew Shoemaker told CBC Hamilton. The impact was overwhelmingly negative.
“I am happy to never do business with these companies again,” he said.
Shoemaker said nearly half of the homes he owns in Sault Ste. Marie are in a state of “irreparable” disrepair and remain vacant. They are in a dispute with the city over property standards and fire code violations, and owe $645,000 in unpaid taxes, according to court documents.
“I think our community would be better off if the properties we own in Sault Ste. Marie were in the hands of other landowners, preferably local landowners,” Shoemaker said.
Core Developments CEO Hawtin said the company is interested in buying more properties and limiting the number of tenants it evicts.
Core has a similar business model to SID Development, which owns 550 properties, but has a “decent debt-to-equity ratio,” Hawtin said.
Hawtin said if the home is sold to someone who wants to live there and the lender gets a court order to evict them, or if the case drags on and SID Development can't afford to keep the home in livable condition, the tenant will said they could face eviction.
“I sincerely hope that no renters are evicted during this process,” he said.
