Judge blocks RBC bid on 2 firms, bankrupts Coquitlam firm.
Royal Bank of Canada's attempt to bankrupt two holding companies owned by construction brothers Craig and Kyle Smith was dismissed by a British Columbia Supreme Court judge on December 23, 2025, but a related company holding a large industrial property in Coquitlam was ordered into bankruptcy, a decision that follows a series of financial difficulties for the brothers' businesses.
In a ruling, Justice Michael Stephens determined that Royal Bank of Canada did not provide sufficient evidence to force Bastian Holdings Ltd. and Krystle Holdings Ltd., owned by Craig and Kyle Smith respectively, into bankruptcy. These holding companies are connected to Whitewater Concrete and Whitewater Development, which were placed into receivership on July 2, 2024, following an application by RBC. The bank's action stemmed from debts exceeding a combined $11 million related to a credit agreement originally with HSBC Bank Canada.
The court did, however, approve the bankruptcy application for a third company, 145 Golden Drive Ltd., which held the 6.6-acre property that served as Whitewater Concrete's head office. This property was sold in May 2025 by a court-appointed receiver, Deloitte Restructuring Inc., for $21.2 million. The majority of the proceeds went to the Business Development Bank of Canada, which held the primary mortgage on the property. The judge's decision on 145 Golden Drive Ltd. was based on evidence of multiple unpaid debts, including money owed to RBC, $26,729 in taxes to the Canada Revenue Agency, and approximately $8.6 million to other unsecured creditors. BDO Canada Limited has been appointed as the trustee to manage the company's bankruptcy process.
A key point in the case was whether the Smith brothers could act as directors for their companies, given they were personally declared bankrupt in a separate decision which is currently being appealed. RBC argued they were disqualified, but the judge found that the appeal paused that rule. The judge concluded that RBC failed to prove the brothers' personal holding companies had generally stopped paying their debts to more than just one creditor within the six months before the application was filed. Evidence presented by RBC regarding a second unpaid mortgage on a Maple Ridge property was not found to be conclusive of a default before the filing date.
