Picture
Picture
Name and Title
Marlin J. Horst
Partner
Partner
Year of Call

1989 (Ontario)
1997 (Bermuda)

Memberships
  • Canadian Bar Association
  • Ontario Bar Association
  • American Bar Association
Publications
Description

Marlin Horst head shotPeople who put down a deposit for a property on behalf of a company that is not yet incorporated could lose that money if the buyer pulls out of the deal, says Toronto corporate lawyer Marlin Horst.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2019-05-15
Description

Marlin Horst head shotA Canadian Securities Administrators’ (CSA) plan to increase oversight of syndicated mortgages is an effort to protect ‘unsophisticated’ investors from risk, Toronto corporate lawyer Marlin Horst tells The Lawyer's Daily.

The CSA has issued a call for comments on proposed amendments that were first suggested in March 2018, The Lawyer's Daily reports.

The council for the provincial and territorial securities regulators indicates the changes will harmonize a regulatory framework for syndicated mortgage investments (SMI) and increase safeguards for investors, the publication reports.

An SMI is a way of funding commercial or residential developments with multiple investors putting their money together to target large-scale real estate projects, The Lawyer's Daily reports, adding the investment is a mortgage registered against title to the property being developed.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2019-04-10
Description

Marlin Horst head shotWhen someone dies with a life insurance policy listing a clear beneficiary, anyone with a dispute should have solid evidence to support their argument, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

Horst, partner with Shibley Righton LLP, cites a recent Ontario Court of Appeal case to illustrate his point.

Court documents show that in 2014, two men opened a jewelry store in London, Ont. As part of their business arrangement, they took out a life insurance policy on each other, with the company paying the premium. One of them died 16 months later, leaving the partner named as the sole beneficiary of a $250,000 policy.

The estate of the deceased partner, with the wife acting as trustee, disputed that payment. The judgment notes that she claimed that her husband verbally told her she would receive the life insurance money if he died. She also pointed to a handwritten note made by the insurance agent and attached to the policy, concerning a discussion between the two business partners about having a buy/sell agreement.

Horst explains that a buy/sell agreement stipulates that if one of the partners dies, the other one must use the insurance money to buy out the shares of the deceased shareholder. In this case, however, he says the buy/sell provision was not a formal part of the shareholder agreement.”

Instead, the policy simply named the partner as the beneficiary, without stipulating that he had to use the insurance money to buy out the shares from his former partner.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story
.


Date_Published
2019-03-21
Description

Marlin Horst head shotA former telecommunication executive’s attempt to shield family properties from his bankruptcy proceedings provides a textbook example of a sham trust, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

In a recent decision, an Ontario Superior Court judge ruled the trusts holding a farm and cottage for the benefit of the man’s children and stepchildren were void, relying in part on expert evidence that showed the font used in the text of the trust did not exist at the time he claimed to have drawn them up.

But Horst, partner with Shibley Righton LLP, says the font discrepancy was just the “icing on the cake” for the successful trustee in bankruptcy, whose motion to have the bankrupt’s interest in the properties declared assets of the estate — and therefore available to creditors — was granted.

“There were so many other things that pointed to the trust being a sham, and the decision lays those out in great detail,” he says. “There was very little evidence to suggest that the property was ever held genuinely in trust, and I think the result would have been the same, even without the font element.”

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2019-02-12
Description

Marlin Horst head shotSuccession planning can ease the transition when the time comes to transfer ownership of family-run businesses, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

A recent report commissioned by the Canadian Federation of Independent Businesses (CFIB) found that just eight per cent of small and medium enterprise (SME) owners had a formal succession plan in place.

Around 40 per cent of the 2,500 respondents to the CFIB survey had an informal plan in place but more than half of the business owners had no plan at all for the life of the company after their departure.  

That was despite evidence that 47 per cent of owners intended to leave their businesses within five years, and almost three-quarters wanted to be out within a decade. In addition, around 62 per cent intended to rely on the proceeds of an eventual sale to partially fund their retirement.

Horst, partner with Shibley Righton LLP, says it’s never too early to start planning a succession, but adds that he’s not surprised by the results of the survey. 

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story
.


Date_Published
2019-01-23
Description

Marlin Horst head shotExecutors should make sure beneficiaries are fully informed before taking compensation from the estate according to a recent decision, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com

The case involved a disputed passing of accounts by a lawyer acting as an estate trustee on a $3-million estate.

The lawyer, who spent 10 years without formally passing accounts, argued beneficiaries’ objections to actions more than two years old should be struck out under the Limitations Act.

However, a unanimous panel of appeal court judges, sitting as the Divisional Court, upheld a lower court judge’s ruling in favour of the beneficiaries.

“By filing a notice of objection to accounts in response to an estate trustee’s application to pass accounts, a beneficiary is not commencing a proceeding in respect of a claim within the meaning of s. 4 of the Limitations Act,” Appeal Court Justice David Brown wrote for his colleagues in dismissing the appeal.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story
.


Date_Published
2018-12-21
Description

Marlin Horst head shotA defrauded corporate lender who unsuccessfully tried to sue the government to cover $1.8 million in losses was always facing an uphill struggle, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

A better strategy for the lender would have been to conduct more stringent due diligence at the outset rather than suing the Crown after the fact, says Horst, partner with Shibley Righton LLP.

The Ontario Court of Appeal matter involved a lender who advanced $1.8 million in mortgages to a man on the grounds he was the sole owner and officer of a company. The loans were advanced after the lender checked the Ministry of Government and Consumer Services' corporate registry and found the man was listed as a director and officer.

However, it transpired that this was a complete fabrication and the man had merely filed a change order to the registration with no authority whatsoever.

The appellant argued that the ministry owed a duty of care to reasonably ensure the accuracy and reliability of the information it collected, maintained and disseminated for a fee when it knew or ought to have known that the appellant would rely upon such information.  

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-11-26
Description

Marlin Horst head shotIt can be difficult for family business partners to keep emotions separate from management and operations, particularly when one generation is passing control off to the next, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

“Family business disputes are not as uncommon as people think, especially when you have a strong founder passing off an empire to the next generation,” says Horst, a partner with Shibley Righton LLP.

Earlier this month, an Ontario business magnate and his wife launched a lawsuit claiming their daughter, two grandchildren and others are allegedly mismanaging the family's assets and trust funds. The Canadian Press reports the suit, which has not been proven in court, seeks more than $500 million in damages.

In their statement of claim, the parents accuse their daughter and others of allegedly "having undertaken a series of covert and unlawful actions" that have been contrary to the best interests of other family members. As well, they claim their daughter led an extravagant lifestyle that has allegedly drained the company in excess of $70 million.

His daughter has denied the allegations stating, “Family relationships within a business can be challenging. My children and I love my father. However, his allegations are untrue and we will be responding formally to the statement of claim in the normal course of the court process,” the newswire reports.

Horst says a common point of friction in some companies is when elders back out to let the next generation run the family business.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-10-29
Description

Marlin Horst head shotA recent Ontario Court of Appeal ruling on interest disclosure is likely a relief to lenders as it confirms that a small violation of s. 4 of the Interest Act will not impact all interest payable under a loan agreement, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

The case centred around a number of loans made by one party to another — although the respondent party defaulted, it disputed the amount of interest owing.

Specifically, the respondent claimed that term in the loan agreement, requiring payment of a .003 per cent discount fee of the outstanding loans on the repayment date and every day thereafter while it remains outstanding, failed to comply with s. 4 of the Interest Act.

The Act requires that any written agreement for the payment of interest at a rate or percentage per day, week, month or any period less than one year must contain “an express statement of the yearly rate or percentage of interest to which the other rate or percentage is equivalent.”

“Section 4 provides that where an agreement fails to comply with this requirement, ‘no interest exceeding the rate or percentage of five per cent per annum shall be chargeable,’” notes the court.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-09-25
Description

Marlin Horst head shotA report that suggests the federal government could collect $2 billion annually if it implements a tax on inheritances of $5 million or more doesn’t take some unintended consequences into account, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

“One of the problems with an inheritance tax is that the very wealthy will structure their finances in such a way that they don't have to pay it,” says Horst, a partner with Shibley Righton LLP. “People will transfer everything to their heirs before they die or they will set up family trusts — money that will likely go offshore.”

The Canadian Centre for Policy Alternatives (CCPA) report looked at inequalities in wealth between those on the extreme high end in Canada and everybody else. Economist David Macdonald told CBC News the 87 wealthiest families in the country owned a collective $259 billion at the end of last year.

“He contrasted that with the numbers for the median Canadian family, which saw its net worth increase by just 15 per cent over the same time period — rising to $295,100 from $257,200,” the article states.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-08-23
Description

Marlin Horst head shotProponents pushing blockchain technology to create mortgages are putting the cart before the horse, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

Horst, a partner with Shibley Righton LLP, says blockchain — best known as the encryption technology behind Bitcoin — is essentially a digital ledger that can be used for many other purposes beyond currency, but he’s wary of a scheme being promoted in Bermuda to create mortgages which investors could then purchase fractionally.

The Financial Post reports that the company would use local financial professionals to run “mortgage hubs” that would evaluate and underwrite them, dividing each property transaction into 100,000 Fractional Mortgage Share (FMS) units that could then be listed on the company’s blockchain-based exchange. Investors would purchase an FMS using blockchain-based tokens and would harvest principal and interest payments from the property’s owner each month.

In some cases the mortgages might also be crowdfunded with smaller fractions for investors but its setup is poorly timed and fraught with potential problems, Horst cautions.

While these mortgages are not available in Canada, promoters of the concept say it could be set up in any jurisdiction which raises a red flag, he says.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-07-16
Description

Marlin Horst head shotSandbagging reflects poorly on all parties to a transaction, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

Horst, a partner with Shibley Righton LLP, explains that the practice arises in mergers and acquisitions when a buyer becomes aware that the seller will be unable to meet all the representations and warranties made in the agreement.

That allows the purchaser to close the deal with the intention of later suing the vendor in court for damages related to the known deficiencies since contracts normally provide indemnities for buyers in the event promises can’t be met.

Horst says examples of sandbagging are relatively rare in Canada, but the issue is growing as parties on both sides take the risk of an episode into consideration when completing transactions. Nevertheless, he says the trend is concerning.

“If vendors are making representations and warranties that are not correct, then it means they’re not doing their own internal due diligence properly,” Horst says. “If the buyer discovers something that the vendor itself doesn’t know, it shows a lack of knowledge about their own business.”

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story
.

Date_Published
2018-06-19
Description

Marlin Horst head shotProposed rules around syndicated mortgage investments (SMI) will help “weed out” those who are taking advantage of unsophisticated investors, Toronto corporate and commercial lawyer Marlin Horst tells The Lawyer’s Daily.

An SMI “is a method of funding commercial or residential developments where two or more people pool their money to invest in large-scale real estate projects,” the article states. “The investment is a mortgage registered against title to the property that is being developed.”

The legal publication notes the Financial Services Commission of Ontario has issued more than $1 million in fines against companies involved in the SMI market and the Canadian Securities Administrators (CSA) has put forward proposed amendments in an attempt to harmonize the regulatory framework across Canada.

Horst, a partner with Shibley Righton LLP, says the syndicated mortgage market is “ripe for taking advantage of less sophisticated investors,” who think a mortgage is a good, safe investment.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-03-22
Description

Marlin Horst head shotWhile a Mareva injunction is an effective tool to stop another party from dissipating their assets, a recent Ontario Court of Appeal (OCA) ruling confirms that it will not keep a creditor from being able to access those funds, Toronto corporate and commercial lawyer Marlin Horst tells AdvocateDaily.com.

In the case, one company was granted a Mareva injunction against another. However, a creditor later applied to vary the injunction, so that it could seize money in the second company’s account under a properly issued writ of seizure and sale.

While the company appealed the motion judge’s decision to vary the Mareva injunction, the OCA dismissed the appeal, noting: “... the appellant’s Mareva injunction gives it no proprietary interest in the funds in 701. It has been unable to date to prove or establish its claim in respect to account number 701. There is no basis for the third party, [the creditor], to suffer prejudice as a result.”

Horst, a partner with Shibley Righton LLP, says the ruling shows the courts will not stand in the way of a party who has received judgment from executing against funds in a bank account, even if a Mareva injunction is in place.

In addition, he says, if a party had been given security over their assets, a Mareva injunction would not stop the secured party from having the right to realize on those assets.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-02-21
Description

Marlin Horst head shotCredit bidders will have to pay close attention to the wording of purchase agreements and guarantees after Ontario’s top court reduced the amount a company president owed from US$3 million to just US$250,000, says Toronto corporate and commercial lawyer Marlin Horst.

The defendant in the case provided a personal guarantee for corporate indebtedness, limited at $3 million, as part of a financing agreement with a bank. When the company’s debt was purchased by the plaintiff — a distressed debt lender — the guarantee was part of the deal.  

After the company defaulted on its loans, the lender ultimately purchased its assets with a credit bid worth $34 million, $3 million less than the $37 million the defendant was owed by the company.

A motion judge ordered the former president to pay the full difference plus interest due to the guarantee, but a unanimous panel of Ontario’s Court of Appeal overturned the decision and reduced his liability to $250,000.  

The court ruled that there was no evidence that $2.75-million worth of facility and forbearance fees, which were specifically excluded from the guarantee, had been included in the extinguished portion of the debt.

This is an excerpt from an article that appeared on AdvocateDaily.com.

Please click here to read the rest of the story.

Date_Published
2018-01-12
Description

Marlin Horst head shotA recent decision shows courts will take a pragmatic approach to insolvencies where there are limited assets at stake, says Toronto corporate and commercial lawyer Marlin Horst.

In the Superior Court case, the judge decided a court-appointed receiver should have responsibility for evaluating the claims of secured creditors, even though the debtor had subsequently made an assignment in bankruptcy with a different trustee.

Under normal circumstances, explains Horst, a partner with the Toronto office of Shibley Righton LLP, court-appointed receivers are often made trustees when the company enters bankruptcy. However, that didn’t happen in this case because the company made its assignment voluntarily, and without leave of the court.  

This is an excerpt from an interview that apeared on AdvocateDaily.com.  Please click here to see the complete conversation.

Date_Published
2017-10-02
Description

Established banks’ control over Canadian fintech may be inhibiting the sector’s development in this country, says Toronto corporate and commercial lawyer Marlin Horst.

A recent report by the Competition Bureau concluded regulators and institutions must work together to boost flagging innovation rates in Canada’s emerging technology-driven financial services after canvassing the opinions of players in the field.

But Horst, a partner with the Toronto office of Shibley Righton LLP, tells AdvocateDaily.com that the structure of the Canadian financial services industry is a big barrier

“In the rest of the world, fintech is a disruptor that changes the way people deal with financial institutions, but in Canada’s its’ been co-opted by the old guard,” he says.

Canada’s unusually concentrated industry, which sees just five banks account for more than 90 per cent of the domestic market, means that upstarts set their sights on joining the established players, rather than challenging them, Horst says.

This is a excerpt from an article that appeared on AdvocateDaily.com.  Please click here to read the complete story.

Date_Published
2017-09-05
Description

The Canadian Securities Administrators (CSA) recently updated its regulatory sandbox, which is aimed at providing support for Fintech businesses working on innovative products.

Marlin Horst, Shibley Righton LLPRegulatory sandboxes are used to allow developers to test their products or business models in a live environment without the restrictions of heavy regulations.

The CSA regulatory sandbox update covers a five-step process for Fintechs making use of the space. The steps include directions regarding filing of applications, the application review process and determine the limits and conditions that...

This is an excerpt of an article that appeared on TheLawyersDaily.ca.  Please click here to read the complete article.

Date_Published
2017-07-18
Description

Creditors must move quickly once they discover their secured property has moved to another province, Toronto corporate and commercial lawyer Marlin Horst tells AdvocateDaily.com.

Horst, a partner with the Toronto office of Shibley Righton LLP, says secured parties generally get 60 days to register in a new jurisdiction when property is brought across borders within Canada. However, since creditors will not always know when a move is made, Ontario’s Personal Property Security Act (PPSA) gives them 15 days to register from the time they received notice that their collateral was “brought in” to the province.

In a recent case, an Alberta auto financing company saw its secured claim on a truck denied by a Superior Court judge after the owner declared bankruptcy in Ontario.

The company perfected its interest in the Dodge Ram 1500 back in 2014, by registering under Alberta’s version of the PPSA when the owner bought it new. However, it took 20 days to register the vehicle under Ontario’s PPSA after receiving notice of the owner’s bankruptcy.

This is an excerpt from an article that appeared on AdvocateDaily.com.  Please click here to read the complete story.

Date_Published
2017-06-28
Description

Counsel will have to change the way they think about priority under the Personal Property Security Act (PPSA) after a decision that favoured a solicitor’s charging order over a perfected security under the Act, says Toronto corporate and commercial lawyer Marlin Horst.

Horst, a partner with the Toronto office of Shibley Righton LLP, teaches a course on the PPSA at Queen’s University’s law school and says he always tells students that the Act applies to any security interest unless it is specifically exempted in the law’s wording.

However, in a recent case, an Ontario Superior Court judge sided with the lawyers for a general contractor, giving it first dibs on bonds posted into court.  

That was despite the claim of a specialty insurer with a registered perfected PPSA security over the contractor's entire assets that it should be first in line, ahead of any solicitor's charging order

This is an excerpt from a story that appeared on AdvocateDaily.com.  Please click here to read the complete article.

Date_Published
2017-05-19
Experience
More About
BIO

Marlin Horst is a partner with Shibley Righton LLP. His experience involves acting on behalf of corporations in a range of industries including financial services, where his practice encompasses all types of lending including syndicated, senior, subordinated, asset-based and project finance.

In addition to his corporate practice Marlin practices in the area of charities and estate planning and administration.  He has experience acting for high net worth individuals as well as other entrepreneurs and business owners.  Marlin has experience acting on behalf of registered charities and other not for profit entities.

Marlin's corporate and lending experience includes transactions in financial services, manufacturing, hospitality, retail, services, energy, mining and private equity industries. He also has expertise in restructuring transactions, acting on behalf of both creditors and debtors. Marlin regularly advises on mergers and acquisitions, mutual funds, real estate, general corporate and commercial transactions as well as venture capital/private equity transactions. Prior to joining Shibley Righton LLP, he practised corporate and finance law in both Toronto and Bermuda.

Marlin is a sessional professor at Queen's University Law School where he teaches courses on Commercial Law and the Personal Property Security Act. In addition, he was an adjunct professor of Banking Law at the University of Western Ontario for over ten years.

Outside of the practice of law Marlin is a director and President of FOCA (Federation of Ontario Cottagers Association).  Marlin has also sat on the board of a number of charities and not for profit entities.

Contact Information

T: 416.214.5211
F: 416.214.5411
E: marlin.horst@shibleyrighton.com

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Education

Cambridge University, LL.M., 1987
University of Western Ontario, LL.B., 1986, B.A. 1983

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