Portfolio Preservation

Investments & Taxation

Martello was retained in the early 1990s to oversee a portfolio of shopping centres located in western Canada that was owned by an American investor who was the patriarch of a large family. He came to Martello for local market knowledge and management skill, but the advice that Martello would provide in the far future was crucial for the long term success of the family’s holdings. After a number of years working on the portfolio the patriarch passed away, leaving the portfolio and a variety of unresolved Canadian taxation issues to his wife. Martello provided asset and property management services to the matriarch on all aspects of the family’s Canadian real estate holdings for many years until she passed away in 2008. The death of the family matriarch triggered considerable American tax liabilities when the shares of the holding company were transferred to the beneficiaries of the estate. This new tax liability when combined with the previously outstanding Canadian liabilities would have forced the sale of the portfolio.

Preservation Strategy

By working with various taxation experts, lawyers and accountants, Martello was able to recommend a refinancing strategy to the family that would preserve the portfolio, while at the same time dealing with the looming tax liabilities. Martello provided comprehensive services to refinance the properties, including tendering appraisals and negotiating with lenders to secure the best possible financing to settle the liabilities with the CRA and IRS.

The Result

Through successful execution of the strategy, all properties in the portfolio were retained for the beneficiaries of the estate. Today, the mortgages are slowing being repaid, and the family continually benefits from the ongoing cash flow to support their lifestyles. In the end, by retaining Martello more than twenty years ago, the patriarch of the family was ensuring that his children and grandchildren would benefit from his success for decades to come.

Executive Summary

Executive Summary


Portfolio Region

Western Canada

The Client

American Investor and Extended Family

Problem to be Resolved

Multi-National Tax Liabilities

Consultation Timeline
2008—2012
Asset Manager

Wayne Smithies

Portfolio Managers

Kevin Ferguson
Brenda Marco

Result

Complex refinancing Portfolio Preserved Tax liabilities resolved

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