Coverage of the latest Canadian insolvency filings, court cases, news and more
10000050 Manitoba Ltd., the owner of a Bombardier Challenger 604 (the “Aircraft”), had a receiver appointed over the Aircraft on September 16 on application by PNC Equipment Finance, a Division of PNC Bank Canada Branch (“PNC”). To finance the acquisition of the Aircraft, the company borrowed US$3.36 million pursuant to an Aircraft Loan Agreement which was secured by the Aircraft. The company has been in continuous default under the Aircraft Loan Agreement since June 1, 2021, including because of the commencement of proposal proceedings by the company’s sole shareholder, Sean McCoshen. As of July 9, the outstanding indebtedness under the Aircraft Loan Agreement was approximately US$3.05 million. Immediately following the granting of the Receivership Order, an Approval and Vesting Order was issued approving the sale of the Aircraft to Sunwest Aviation Ltd. Farber was appointed receiver. Counsel is Blakes for PNC and MLT Aikins for the receiver.
Plus Products Inc., a Vancouver, British Columbia-based parent company of a branded cannabis-infused edible manufacturing enterprise (the “Plus Group”), obtained CCAA protection on September 13. The company itself has limited assets and operations, but is the Plus Group’s primary vehicle for raising debt and equity in the capital markets. It is a reporting issuer in British Columbia, Alberta and Ontario, and is listed on the Canadian Securities Exchange under the symbol “PLUS” and the OTC Market Group in the US under the symbol “PLPFT”. The operating subsidiaries hold licences that permit them to manufacture, distribute and sell the Plus Group’s products in California and Nevada. The Plus Group has significant funds on hand – likely sufficient to continue operating in the ordinary course until about February 2022. However, there is currently no expectation that the Plus Group will be able to generate sufficient revenue or raise additional funds to make the interest payments due under certain unsecured convertible debentures or to continue to meet its liabilities beyond that date. PwC was appointed monitor. Counsel is Blakes for the monitor and Fasken for the company.
The Bridal House, an Edmonton, Alberta-based bridal boutique, filed an assignment in bankruptcy on September 10. In a message on its website, the company, which had served Edmonton area brides for 27 years, cited the onset of the COVID-19 pandemic, the shutdown of non-essential businesses and limited retail capacity as the reasons for its filing. Faber is the bankruptcy trustee.
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“Study the past if you would define the future.” Confucius’ quote is a favourite of Michael Rotsztain, who has been practising insolvency and restructuring law for over 40 years. Beginning his career at the legendary insolvency firm of Harries Houser, where he had the good fortune of being mentored by a bankruptcy law dream team, Michael spent the major part of his career at a leading Bay Street firm and since 2014 has been the chair of GSNH’s five-lawyer Restructuring and Insolvency Group. Michael recounts how insolvencies and restructurings have evolved over his career and shares what he thinks are the next steps in the evolution.
The Insolvency Institute of Canada presents the results of its study into how many Canadian insolvencies have been due to the Covid-19 pandemic, with the biggest takeaway being that Covid-19 has not yet had the massive impact that was expected and was the primary factor for the insolvency in only 15% of the filings.