Drowning in debt, out-of-town landlords owe $775K to city, other local businesses

EDITOR'S NOTE: A version of this article originally appeared on SooToday on Feb. 6. It is being republished here for readers who may have missed it.

Insolvent out-of-town landlords that own more than 150 local rental properties hiked up a hefty tab totalling hundreds of thousands of dollars in Sault Ste. Marie prior to seeking court-ordered protection from hundreds of lenders, court documents show. 

The biggest debt accrued by the property owners is with the municipality itself: Documents filed in the recent insolvency proceedings show that all seven privately held corporations with properties in the Sault owe more than $645,000 to the City of Sault Ste. Marie, with more than $609,000 of that amount accounting for municipal tax arrears owed to city hall. 

Another $52,346 is owed to PUC Services Inc. The landlords have also managed to rack up bills totalling more than $76,000 with nearly a dozen local contractors. 

All told, the property owners owe a combined $773,000 to local businesses and governments.

The news comes after SooToday first reported that the landlords behind 11 insolvent corporations — Aruba Butt, Ryan Molony and Dylan Suitor — filed for protection from creditors in the Ontario Superior Court of Justice last month, claiming they owe more than $144 million in unpaid loans and have less than  $100,000 in the bank.

Seven of those corporations currently own 152 properties in Sault Ste. Marie, court documents show. There are 201 rental units within those properties — 122 are occupied, while 79 remain vacant.  

The corporations with properties in the Sault that have sought creditor protection are: 

• DSPLN Inc.
• Balboa Inc. 
• Happy Gilmore Inc.
• Interlude
• Joint Captain Real Estate
• Multiville Inc. 
• The Pink Flamingo Inc. 

The now-insolvent corporations helmed by Butt, Molony and Suitor are affiliated with SID Developments, SID Management and SID Renos, all of which are based in Burlington, Ont. Together, they are referred to in court documents as a group of companies “specializing in the acquisition, renovation and leasing of distressed residential real estate in undervalued markets throughout Ontario.”

The group owns more than 600 rental properties in housing markets across Ontario with lower average costs of living, including Timmins, Sudbury and the Sault — making it “one of the largest holders of residential real estate in Ontario,” wrote Ontario Superior Court Justice Jessica Kimmel. 

The SID family of companies was founded by Robert 'Robby' Clark, a former child actor known for his starring role on The Zack Files, a Canadian sci-fi television series which aired on YTV from 2000 to 2002, according to the IDMB website. 

All three landlords behind the insolvent corporations — Butt, Molony and Suitor — are closely linked to Clark and his business dealings.  

Molony is listed as the president of all three SID companies, while Butt — listed on the SID Developments website as Aruba Clark — acts as chief information officer for all three companies. Suitor, meanwhile, has been identified as a business partner of the former child actor in a handful of real estate websites and podcasts. 

The landlords behind the insolvent corporations haven’t made many friends locally since scooping up dozens of properties in the Sault as housing prices plummeted during the COVID-19 pandemic. 

On top of the debts they owe to the City of Sault Ste. Marie and local contractors, three of the corporations are also in Provincial Offences Court answering for 37 property standards violations and a number of Ontario Fire Code offences locally, according to correspondence from city solicitor Karen Fields contained in court documents. “We would like to make sure the court understands that staying those matters has the potential for safety issues on those properties,” Fields wrote. 

As SooToday reported last year, DSPLN Inc. was fined $140,000 after being found guilty of six Ontario Fire Code offences in provincial offences court. The majority of the offences found at the multi-residential building in the city's west end were linked to smoke and carbon monoxide detectors.  

The insolvent corporations have been authorized by Superior Court to borrow from a $4-million credit facility in order to finance their day-to-day operations. They have asked the court for extended protection from their creditors until the end of March 2024.