The former GM property on Ontario Street in St. Catharines could be close to a sale after a Superior Court judge's ruling on Wednesday.

The Toronto commercial court gave permission to the mortgagee to sell the property under a power of sale to Losani Homes, or any third party in the event that a sale to Losani does not proceed.

The City of St. Catharines was scheduled to argue it be allowed to sell the property at 282-285 Ontario St. and 10 Pleasant Ave. in a tax sale, because the city is owed more than $1.59 million in property taxes by owner Bayshore Groups.

But Superior Court Judge Thomas McEwen explained in a written decision that he was adjourning the city's motion to late September over objections by the city's counsel Michael Valente.

"Based on the discussions with counsel for the parties, I am optimistic that a sale will take place which will be to the benefit of all stakeholders — including the city," McEwen wrote, referring to the potential Losani sale.

"It is my view that the proposed sale ought to be pursued."

McEwen added that in fairness to St. Catharines, the process cannot be allowed to be "open-ended." He set a return date for the city's motion on Sept. 20 while all parties will return to court Sept. 4 to provide an update on the sales process.

Losani Homes, a Stoney Creek-based award-winning family company in business for more than 40 years, was unavailable Wednesday for comment on the potential purchase.

The judge's court orders were made behind closed doors in a case conference with lawyers in the commercial court on University Avenue and released in writing afterwards.

They were part of the proceedings in a $15-million lawsuit by Mississauga-based Attar Metals against Bayshore Groups, Bayshore International, 2390541 Ontario Inc., 2202180 Ontario Ltd., Bayshore principals Chiara and Robert Megna, and Bayshore's mortgagee 2496582 Ontario Inc. and its principal Aaron Collina.

Attar Metals claims Bayshore did not honour a 2014 contract worth millions of dollars related to the removal of scrap metals from the former GM property. Bayshore has denied the allegations and filed a counterclaim.

Collina and his company have been asking the court since December to allow them to sell the property at 282-285 Ontario St. and 10 Pleasant Ave. under a power of sale due to the mortgage being in default.

The property has an injunction on it because of the Attar lawsuit against Bayshore. Attar's lawyer has argued the former GM property is the only substantial asset of the Megnas and is key for their suit.

For sale signs were posted on the 54.7-acre (21.88-hectare) property on March 7 after Bayshore listed it with Cushman and Wakefield.

On Wednesday, McEwen ordered that a Dec. 21, 2017, certificate of pending litigation registered by Attar Metals on the title to the property and all other restrictions on the title be removed by court order once an executed agreement of purchase and sale is produced.

He ordered that mortgagee 2496582 Ontario Inc. be free to sell the property to Losani Homes or any related entity or a third party under power of sale.

He also ordered that once the GM property is sold, the mortgagee will pay $1.25 million into a trust account mutually agreed to by Attar Metals and the mortgagee. The funds will be held until a court order is made directing how they will be distributed or until there is written consent on behalf of all parties directing their distribution.

The order also stated that within 30 days of the former GM property sale, the mortgagee must provide an accounting of the proceeds of sale to Attar Metals and the defendants in the lawsuit.

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Lawyers for the City of St. Catharines, Bayshore and the Megnas, Bayshore's mortgagee and Collina and Attar Metals were in court for the proceedings Wednesday.

Attar and the City of St. Catharines aren't the only ones with a stake in the property. Canada Revenue Agency has a $1.9-million lien on the property under the Excise Tax Act and St. Catharines-based Better Neighbourhoods Inc. has a $160,841 construction lien alleging nonpayment by Bayshore after doing master planning for the GM site.