Coverage of the latest Canadian insolvency filings, court cases, news and more
North American Lamb Company (“NALCO”)
North American Lamb Company (“NALCO”), a Manitoba and Alberta-based lamb producer and processor, and various subsidiaries (the “NALCO Group”) obtained CCAA protection on August 8, on application by Fresh Canada Meats Ltd. (“FCM”), a creditor and majority shareholder of the NALCO Group. Approximately 70% of the lambs produced in Alberta are processed by the NALCO Group. Notwithstanding this significant market share, the company has incurred ongoing operating losses since its inception in 2018. By May 2022, the NALCO Group faced a severe liquidity challenge and began delaying payments to non-essential creditors to preserve cash. This crisis ultimately culminated in both of the NALCO Group’s primary secured creditors, BNS and FCC, serving notices of intention under the Farm Debt Mediation Act and the BIA. EY was appointed monitor. Counsel is North & Company for NALCO, MLT Aikins for FCM, McMillan for BNS, Sharek Logan & van Leenen for FCC, Norton Rose for the monitor and Bennett Jones for 2079468 Alberta Ltd., the NALCO Group’s minority shareholder.
By Dina Milivojevic
iS5 Communications Inc.
iS5 Communications Inc., a Mississauga, Ontario-based company that provides customers with information technology services and proprietary hardware products – specifically servicing critical infrastructure, including the energy, transportation, heavy industrial, and defense industries – filed an NOI on August 5, listing approximately $15 million in liabilities, including $1.9 million USD to Silicon Valley Bank. The company plans to undertake a stalking horse sale process and is working toward a stalking horse agreement during the NOI period. Grant Thornton is the proposal trustee. Counsel is Fasken for the company, Aird & Berlis for Silicon Valley Bank, TGF for the stalking horse purchaser, and Cozen O’Connor for the proposal trustee.
By Dina Milivojevic
Cedar Road Bioenergy Inc.
Cedar Road Bioenergy Inc., a Nanaimo, British Columbia-based clean energy company, was placed in receivership on August 4, on application by Vancouver City Savings Credit Union. In 2005, the company entered into a development agreement with the Regional District of Nanaimo pursuant to which the company was permitted to construct and operate a facility to harvest methane gas, convert it to electricity which was ultimately sold to third parties including BC Hydro. The company’s business was interrupted by labour shortages and material and equipment servicing delays in early 2020 due to the Covid-19 outbreak. Parts and servicing required for each of the company’s two generators are not currently available due to supply chain delays. The company defaulted on its loan to Vancouver City Savings Credit Union and was unable to repay the loan following the expiry of the demand letters. D. Manning & Associates was appointed receiver. Counsel is Owen Bird Law Corporation for Vancouver City Savings Credit Union.
By Dina Milivojevic
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M.O.S. MortgageOne Solutions Ltd. v. Heidary, 2022 ONCA 561
Does a consent judgment fall within section 178 of the BIA and survive a discharge? The appellant Heidary granted a mortgage to the respondent M.O.S.
Howard Steinberg on the growing pains of the cannabis industry
Canada’s cannabis industry is starting to experience growing pains. It is grappling with a lack of capital, a mismatch in supply and demand, and many of the other challenges that can be expected in a nascent industry.
Howard Steinberg, a seasoned executive and CRO focused on change management and who has been in the cannabis industry for many years, recently sat down with us to chat about market conditions and a recently completed restructuring in the space.
Chandos Construction Ltd. v. Deloitte Restructuring Inc.: Anti-Deprivation Rule Exists in Bankruptcy Law
Romain Viel, Hilary Gilroy and Colin Boyd of McInnes Cooper discuss the key takeaways from the Supreme Court of Canada’s decision in Chandos Construction Ltd. v. Deloitte Restructuring Inc. and provide guidance on the precise scope of the anti-deprivation rule, including the types of clauses that would not violate the rule.
Moves and Promotions
- Tevia Jeffries has joined Farris LLP in Vancouver to expand the firm’s restructuring and insolvency practice.
- Kathryn Esaw of Osler, Mitch Grossell of TGF, Gabriel Lepage of Davies, Warren Leung of Deloitte, Rachel Nicholson of TGF and Aryo Shalviri of Blakes have been named members of the International Insolvency Institute Class XI for the NextGen Leadership Program. NextGen Class XI will be honoured at the III’s 22nd Annual Conference in Toronto on September 6-8, 2022.
- Jonathan Yantzi has joined the Financial Restructuring and Insolvency practice of Davies in Toronto. Jonathan was previously with Aird & Berlis.
- PwC has announced 9 new partners and 46 new directors across its global restructuring practice. In Canada, Eric Tadros, Sarah Vakil, Lucas Matsuda and Graham Page have been promoted to Managing Director and Julie Brunet and Christine Sinclair have been promoted to Director.
- DLA Piper (Canada) LLP is pleased to announce that Colin Brousson (Vancouver) and Edmond Lamek (Toronto) have been named Co-Chairs of its Canadian firm’s Restructuring group.