Flato Faces Receivership on Eight Properties; Fate of Owen Sound's Greystone Village Development Unclear
Seven companies tied to Flato are in receivership over roughly $29 million in defaulted loans. What it means for Owen Sound's approved subdivision is unclear.
Seven companies related to Flato Developments Inc. — the Markham builder behind Owen Sound’s approved 716-unit Greystone Village subdivision — have been placed in receivership over roughly $29 million in defaulted loans. The Owen Sound lands are not named in the court order.
An Ontario court granted the receivership order June 23 on application by Dorr Capital Corporation and Olympia Trust Company, appointing TDB Restructuring as receiver, according to trade publication Insolvency Insider.
The order followed defaults under five cross-defaulted real estate loans, with total indebtedness reaching about $29.07 million by June 5.
The order covers eight properties in Dundalk, Melancthon and Beeton. It does not name any Owen Sound property or Flato Owen Sound Community Inc., the entity that applied to build Greystone Village. On the public record, the Owen Sound subdivision is not part of the proceeding.
The Township of Southgate, which includes Dundalk, acknowledged the receivership in a June 30 media release, saying the affected properties are undeveloped lands and that existing homes and occupied neighbourhoods are not part of the proceedings. Southgate said it would work with the court-appointed receiver as the process moves forward.
Flato’s Grey County footprint
Flato has been behind much of the recent large-scale residential building in Dundalk, which — like Owen Sound — is part of Grey County. Its Dundalk communities include Edgewood Greens and Carriage House, along with a seniors’ apartment building and a commercial plaza.
The eight properties named in the receivership are separate, undeveloped parcels: Southgate has said existing homes and occupied neighbourhoods are not part of the proceeding. The named lands are in Dundalk, Melancthon in Dufferin County and Beeton in Simcoe County.
The Owen Sound project
Flato applied in fall 2021 to build a subdivision on largely vacant land at 1409 and 1415 8th Street East, across from Georgian College. Council granted draft plan approval for the Greystone Village subdivision — plan 42T-20501 — on July 25 2022, permitting an estimated 716 units on 29.6 hectares. The proposal was first pitched at roughly 830 units.
The developer had begun work on the site, according to the mayor. In his Dec. 31 2024 year-end statement, Mayor Ian Boddy said Flato had commenced site grading and stormwater work on Greystone. Flato continues to market the project as “coming soon” on its website.
Developers like Flato typically hold each project in its own company, often with its own lender and loans secured against that project's land. A lender can place into receivership only the companies that owe it. Dorr Capital's order therefore reaches the eight parcels pledged against its loans and stops there.
Flato's other projects, including Owen Sound, sit in separate companies and are not named. Whether they face the same strain that sank these eight is not clear on the public record.
The city’s servicing investment
The Greystone lands sit within the Sydenham Heights planning area, designated decades ago as Owen Sound’s growth area. The Owen Sound Sun Times reported in October 2021 that the city front-ended a $3.5-million cost, around 2019, to extend municipal water and sewer to that part of the city to spur development.
That extension also serves the adjacent Redhawk site, where a 366-unit subdivision was approved in 2019 but has not been built.
Whether the city has recovered any of that cost through development charges or servicing agreements, and what recovery looks like if the Greystone build stalls, could not be confirmed.
What is not yet known
Several questions central to Owen Sound remain open. It is not clear whether Flato Owen Sound Community Inc. or the Greystone lands are affected by any insolvency proceeding, as neither is named in the June 23 order.
The status of the draft plan approval is also unconfirmed: first-phase draft approval was set to lapse July 25 2025 — three years after approval — unless the city extended it. Whether a subdivision agreement was ever executed, and the current state of construction on the site, are likewise unconfirmed.
Owen Sound Current has submitted questions on the project’s status to the City of Owen Sound and will continue reporting as new information becomes available.
Background
Flato and its founder, Shakir Rehmatullah, were central figures in Ontario’s 2023 Greenbelt controversy.
Ontario’s auditor general and integrity commissioner examined the province’s decision to open protected land for development; the integrity commissioner found Rehmatullah was behind three successful requests to remove land from the Greenbelt in Markham and Whitchurch-Stouffville. The province reversed the removals in September 2023 and returned the parcels to the Greenbelt.
The RCMP announced a criminal investigation into the government's Greenbelt decision in October 2023. The investigation remained active as of May 2026, more than two and a half years on, with no charges laid.
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