Coverage of the latest Canadian insolvency filings, court cases, news and more
Burry’s Shipyard, a Clarenville, Newfoundland and Labrador-based provider of services in machining, fabrication, maintenance and ship repairs, filed an NOI on July 10, listing $4.9MM in liabilities, including $1.7MM to Norcon Marine Services and $1.1MM to BDC. Deloitte is the proposal trustee.
The OpsMobil Group, a Calgary, Alberta-based group of oilfield service companies that provides energy, aviation and construction services, filed for protection under the CCAA on July 10. Although the OpsMobil Group’s primary assets are aircraft and aircraft support facilities, it has been focused on transitioning to value added services through its asset management solutions. By nature of its business, the OpsMobil Group’s revenues are dependent on the expenditures of oil and gas producers, which have been depressed since 2014. In 2015, Third Eye Capital purchased the $5.3MM debt owed by OpsMobil to BMO for $3.8MM. After paying its own legal fees in addition to Third Eye and BMO’s legal fees, OpsMobil was only left with $42.0M to prepare an aircraft fleet for the 2016 season, which was grossly inadequate. OpsMobil was able to negotiate and enter into a payment plan with the CRA for amounts owing at the time; however, it eventually missed the third payment and discovered that its line of credit had been restricted due to a lower than expected borrowing base calculation. As a result of the missed payment, CRA issued an enhanced garnishment of OpsMobil’s revenue and accounts. Throughout early 2016, OpsMobil was continuously deprived of funds that were required for its daily operations due to its borrowing base restrictions and CRA’s garnishment. By late June 2018, the group was served with a receivership application by Third Eye, which led to it filing for protection under the CCAA. During these proceedings, the OpsMobil Group will receive $1.4MM in interim financing from Third Eye. EY was appointed monitor. Gowling WLG is counsel to the OpsMobil Group.
Kolsy Homes, a Saskatoon, Saskatchewan-based company that acquires and develops lands in Saskatchewan, along with Rivairo Capital Corporation, a related company, filed for protection under the CCAA on July 9. The sole asset of Rivairo is 5.4 acres of land in Airdrie, Alberta that has been subdivided out for the development of townhomes and condos (the “Rivairo Project”). Based on Rivairo’s aggregate secured indebtedness of $9.4MM, the current value of the Rivairo Project, if sold in a forced-liquidation scenario, would be insufficient to pay all of the company’s secured obligations that are due and owing. Moreover, the company currently does not have enough funds to pay any amount of the $3.6MM it owes to unsecured creditors. Similarly for Kolsy, the aggregate value of its assets – which is approximately $3.3MM – would be insufficient to pay its secured obligations as they become due. The only income that Kolsy receives is $7,600 in annual rent on the 143.6 acres of land that it owns in Corman Park. During the CCAA proceedings, KV Capital will be providing $600.0M in interim financing. Counsel is The W Law Group for the companies, MLT Aikins for The Bowra Group and Bishop & McKenzie for KV Capital.
SUBSCRIBE TO OUR NEWSLETTER
Subscribe to our newsletter and stay up-to-speed on industry news
In a restructuring, time is more valuable than money. This is the key advice of Jonathan Solursh, who, with his team at R.e.l. group inc., has acted as Chief Restructuring Officer (CRO) in many complex restructurings. Here, he gives us an inside look at the role of a CRO and the key part it can play when a company is in a distressed situation.
Michael Myers of Papazian Heisey Myers argues that the BIA’s definition of Transfer at Undervalue is awkwardly drafted and explains how it can become challenging for a trustee or creditor to determine if a transaction can be impugned.