Concept drawings on the city’s website of the 197-unit development. image supplied Patrick Penner, Local Journalism Initiative Reporter

A developer is suing their former partners for millions over an alleged “conspiracy” to oust them from a Port Moody development project. 

Buffalo Megan Holding Ltd., Buffalo Holdings Ltd., and William Wang filed the suit in B.C. Supreme Court on July 26 against PKT Holdings Inc., Quad-City Real Estate Group Ltd., Tina Mu and Yangtao Chai.

The civil suit claims the defendants deliberately breached fiduciary duties and agreements with their partners by pursuing personal interests and profits.

Nearly $15 million is being sought in damages, along with all profits earned by the defendants from the project.

None of the claims have been proven in court, and no response has been filed as of Aug. 24.

“Unknown to the plaintiffs . . . PKT and Mu entered into an agreement with Chai to injure Wang and Buffalo Megan, to acquire the partnership’s assets for themselves and to complete the development themselves thereby earning the profit the partnership would otherwise have earned,” the suit alleges.

All the parties are well known in Vancouver’s Chinese development community, according to court documents.

Wang is described as an experienced and successful developer who, together with his ex-wife, own a number of development companies incorporated under the name ‘Buffalo.’

Defendants Mu and Chai are both described as wealthy Chinese business people.

Mu is an officer, director, shareholder and “controlling mind” of PKT and Quad-City Real Estate Group.

She is described as “highly regarded and trusted” in the financing world in Vancouver, particularly among Chinese investors, with many clients investing solely on her recommendations.

Chai is a business competitor of Wang who had previously taken over or attempted to take over three of his former development projects, the suit claims.

Port Moody project

The lawsuit regards a mixed-use development project aiming to build 197-unit residential units in two six-storey buildings on St. Johns Street, Buller Street and St. George Street.

Wang originally identified the property and developed the concept before approaching Mu in the fall of 2017 to form a limited partnership, according to the claim.

Between 2017 and 2018, the partnership raised approximately $4.5 million to purchase the nine parcels of land and secure additional financing from institutional lenders.

A development agreement set out that Wang would be responsible for the development, while Mu would be responsible for bookkeeping and seeking financing for the project.

Total development costs were estimated at $100 million, with $26 million needing to be raised by investors.

As the parties were not very familiar with each other, the partnership agreement set out that each should have an equal voice, according to the suit.

Both nominated two directors to a board, which required unanimity in decision making.

The partners further established that raising capital would be easier if investors did not face repeated calls for further reinvestment, according to the suit.

No partner or investor was obligated to make additional financial contributions, the suit claims, and no partner was allowed to withdraw their contribution unless the partnership was terminated.

A total of $14 million was raised by May 2021, with investments from Buffalo Megan and PKT accounting for $11 million.

Buffalo Megan owned 40 percent of the partnership while 25 percent was owned by PKT with minority investors making up the remaining 35 percent.

Financial troubles

By mid-2020 Wang returned to China, leading to PKT and Mu having more direct control over development aspects of the project.

Later that year, two minority investors began to complain about the duration of the project and demanded a return on their investment, despite being bound by the rules of the partnership agreement.

The plaintiffs refused but Mu relented, citing potential damage to her reputation, according to the suit.

PKT then acquired the shares from the minority investors, resulting in their ownership stake increasing to 39 percent.

Over the summer of 2021, the partnership required further capital in the amount of approximately $1.5 million, which was the responsibility of PKT to acquire by way of a loan or equity funding.

Wang led the rezoning efforts to increase density at the site, submitting an application in late 2019.

At that point, the application with the city had already progressed past two readings by council, and a public hearing had been held.

The developers were waiting on approval of a rent-to-own agreement, which was under review by the city’s lawyer, before a second public hearing and final reading could be held.

Mu then sought out a $5.4 million short-term loan from two friends and acquaintances. That loan was “unduly onerous,” according to the suit.

The loan had an interest rate of 9.5 percent, which would increase to 25 percent on default after six months.

The defendants insisted the loan be used for the purchase of a municipal laneway from the city, which was not immediately necessary, and to “cash out” the minority partners wanting out of the agreement, according to the suit.

The partnership required additional financing but Mu and PKT refused to arrange or even seek out that capital in breach of their financial duties, according to the suit.

“While Mu and PKT were prepared, therefore, to find and arrange financing which would resolve personal concerns of Mu . . . she did not obtain or even attempt to find financing to address that requirement, although such loans were clearly available,” the suit states.

Wang claims that after PKT and Mu were unable to persuade him to incur an additional loan, they abandoned all efforts to obtain financing for the partnership.

It was at this time Mu and PKT decided to force the sale of the project, and revealed all the partnership’s confidential information to Chai, the suit alleges.


When Wang refused to sell, the suit claims the defendants embarked on a campaign to oust him from the partnership through a secret agreement with Chai.

The suit alleges the defendants created the false impression to institutional lenders of a deadlock within the partnership, and began demanding Wang contribute a proportionate share of ongoing expenses, contrary to the partnership agreement.

PKT and Mu could have easily arranged financing for the additional $1.5 million needed to advance the project at Port Moody council, according to the suit.

The plaintiffs argue the project’s value would increase substantially when the project passed third reading and construction financing could be sought.

At some point, the suit alleges Mu emailed banks claiming that the partnership was in serious financial trouble, was unable to meet its expenses, and Wang and the Buffalo Megan Holdings were refusing to contribute to expenses.

These issues had been “deliberately created” by Mu and PKT, according to the suit, since they were refusing to attempt further financing.

“Such conduct, designed to bring about the demise of the partnership and the loss of its assets, was in breach of Mu’s fiduciary duty, and in breach of the partnership agreement and the development agreement and was an act in furtherance of the conspiracy,” the suit alleges.

Neither bank commenced proceedings, but PKT then filed a petition for receivership over the partnership based on the “untrue assertion that Wang had an obligation to provide ongoing funds,” the suit states.

One of the banks, Prospera Credit Union, commenced proceedings on Nov. 9, 2021, to enforce its security, and the Bowra Group was appointed as a receiver.

The Bowra Group was empowered to advance the development further and was financed by the institutional lenders.

The plaintiffs claim the Bowra Group, throughout the receivership, fully cooperated with PKT and Mu, while ignoring the interests and positions of the defendants.

It is alleged that Buffalo’s development team, which had familiarity with negotiations with city staff, were not utilized to progress the project.

Due to recent changes in civic policy, the receiver decided to reconfigure the development based on the advice of the real estate agents and a consultant it hired.

This decision lowered the equity in the project by $4 million.

Buffalo Megan protested the decision, arguing that a reconfiguration was not authorized by the receivership order.

PKT was in favour of the plan as it reduced the price at which Chai could acquire ownership of the project, according to the suit.

Port Moody council approved rezoning of the project on July 28, 2022.

In August 2022, the receivership order was further amended to permitting the listing and sale of the property with a bid deadline.

Two offers were received, both below the anticipated price, which the plaintiffs say was due to the reconfiguration.

Shortly after, PKT and Chai presented their offer: purchase the partnership’s shares and units for the amount of $20.5 million, with $4.6 million paid as credit to PKT for its investment.

The plaintiffs argue the receiver was not authorized to sell shares of the partnership.

The sale was eventually approved, and funds advanced by PKT on behalf of the “fictitious obligation” owed by Wang was treated as a loan repayable to the partnership, according to the suit.

The plaintiffs argue that, had Mu and PKT followed their fiduciary responsibility, the application would have passed by Port Moody council by September, 2021.

“The project would not have been reconfigured, and the development would have then proceeded and obtained construction financing, or would have been sold at a higher price and on terms more favourable to the partnership than those offered and approved from PKT and Chai,” the suit alleges.

The plaintiffs are seeking damages for loss of profit estimated to be 40 percent of $23 million, costs of the development’s reconfiguration at $4 million, receiverships costs of $559,749, the real estate commission of $379,250, and interest of the receiver’s borrowings of $27,600.

They also want any profits earned by the defendants to be given up, along with additional damages for breach of contract, fiduciary damages and conspiracy to injure.

By Patrick Penner, Local Journalism Initiative Reporter

Original Published on Aug 31, 2023 at 16:15

This item reprinted with permission from   Tri-Cities Dispatch   Coquitlam, British Columbia

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