More than 50 people attended the Vancouver Law Courts this morning and more than 350 were watching online as a receivership order into Greg Martel and his My Mortgage Auction business was reconsidered in B.C. Supreme Court.
Thirteen civil suits have been filed by lenders this year against Martel and the company, also known as Shop Your Own Mortgage, and late last week the company was placed in receivership.
A handful of investors were invited by Madam Justice Shelley Fitzpatrick to address the court this morning. Victoria’s Kira Kelly said “I don’t really hold out much hope but I really hope I haven’t lost my life savings.”
“I’ve had calls from many investors who’ve borrowed money against their houses to invest in this company and obviously this is very serious,” said lawyer Christopher Ramsay outside the courthouse. Ramsay is counsel for the plaintiff that applied for the receivership.
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Peter Rubin, lawyer for the receiver PricewaterhouseCoopers, went through some of the details it has discovered in the two days it’s been able to look into the company and its accounts so far.
“The debtor’s bank account at RBC had a balance of only $273. The receiver noted that during the period, so this is the six month period, $58 million was deposited and then withdrawn from that account,” Rubin told the court.
Rubin later noted that “shareholder advances were used to fund various personal expenses including private jets, luxury apartment rentals, event tickets and vehicle purchases and home escrow payments.”
At the end of the 2.5 hour hearing the judge approved the receiver’s request to add two related corporations to the receivership order including Martel Investments Ltd. based in B.C. and Shop Your Own Mortgage Corp. based in California.
“This order today gives the receiver manager more power, more investigatory power, to enable it to track down and start looking at other companies that may have received money,” said Ramsay.
Fitzpatrick cautioned that “there may be a perfectly legitimate explanation for the various transactions and there may be some explanation perhaps yet to come concerning where the investments that the various investors understood were going to be made are located.”
Ritchie Clark, lawyer for My Mortgage Auction, told the courts he was only retained Monday and hasn’t had a chance to review the voluminous materials.
“My general instructions are that the company has the assets and the ability to discharge its obligations. It’s obviously a complicated situation,” he told the judge.
Justice Fitzpatrick, responding to the defendant’s lawyer at the end of the hearing, said “I think it’s really simple Mr. Clarke, it’s show me the money. I think it boils down to that.”
Greg Martel phoned CHEK News as the hearing was underway, saying he couldn’t get a flight back to Vancouver in time and that his lawyer instructed him he didn’t have to be there since they were requesting an adjournment. Martel reiterated that the delayed payments were a result of ‘hypergrowth’ within the company in the past year and insisted that everyone will be paid back.
Fitzpatrick did grant the defendant an adjournment. The hearing will resume next Wednesday and has been scheduled for two days.
On Thursday night, Martel made his first public comments by issuing a statement that said, “As you know, on May 4, My Mortgage was placed into receivership on the application of one of your fellow investors. That is regrettable, but My Mortgage is not insolvent nor, as has been alleged, is it a Ponzi scheme. It has a sixteen year successful track record.”
The statement continued by saying, “Our business grew exponentially during 2022 and that led to difficulties with staff and administration. However, we went through an extensive reconciliation exercise at the end of 2022, and it clearly showed that My Mortgage has the contracts and the ability to enable all investors to recoup their investments.”
PricewaterhouseCoopers says it will hold a virtual town hall meeting for all affected investors within the next two days. Details will be available on its website.