Coverage of the latest Canadian insolvency filings, court cases, news and more
British Steel, one of Europe’s leading steel makers, obtained Canadian recognition of its UK-based insolvency proceedings on November 13. Despite generating revenue of nearly £1.2 billion, the company lost nearly £19.0 million in its latest fiscal year, as the commercial environment in which it operated deteriorated as a result of, among other things, the uncertainty caused by the UK’s decision to leave the European Union (Brexit). Rescue talks failed and on May 22, the UK Court issued an order for the company to be wound-up. Though British Steel does not have a place of business in Canada, it did sell products to Canadian purchasers. In the course of these sales, British Steel was assessed by CRA for GST/HST liabilities of approximately $850.0 thousand and is owed refunds from the CRA of approximately $527.0 thousand. CRA is holding these refunds and is threatening to take legal action to collect the assessed liabilities. In order to resolve these outstanding tax issues, recognition of the UK proceedings was sought. EY is the information officer. Stikeman Elliott is counsel for the applicant.
Bouclair, a Montreal, Quebec-based retailer of home fashion and decor products, filed an NOI on November 11. Founded in 1970, the company has grown to 92 locations across Canada and employs approximately 1,150 employees. It also sells online and through a wholesale business that operates internationally. Over the past few years, the company has struggled amidst increased competition from large-scale discount US retailers such as Walmart, and online retailers such as Amazon and Wayfair. Internally, the company has also faced issues. A new warehouse management system system led to operational difficulties, and various locations significantly underperformed as a result of high rents, the increase in minimum wage, and the company’s inability to recruit strong talent to manage the stores. Cost-cutting measures have not returned the company to profitability. Through the proposal proceedings, the company will look to complete a transaction that will see a significant portion of the company’s assets sold to a new investor group led by the company’s current president. It is anticipated that 29 stores will be closed and liquidated as part of the restructuring. Deloitte is the proposal trustee. Richter is financial advisor to National Bank, the company’s senior lender owed approximately $18.8 million. EY conducted the company’s pre-filing SISP. Gordon Brothers is conducting the liquidation. RC Benson is CRO. Counsel is Stikeman Elliott for the company, Osler for the proposal trustee, Fasken for Gordon Brothers, McCarthy for National Bank and Davies for certain other subordinated lenders.
Trakopolis IoT (TSX-V: TRAK), a Calgary, Alberta-based technology company, filed an NOI on November 7. Founded in 2006, the company delivers business intelligence to organizations that require the location, status and data on corporate assets such as equipment, devices, vehicles and people through a proprietary online platform. The NOI filing followed the company’s receipt of a demand letter and notice of intention to enforce security from its secured lender, ESW Holdings, owed approximately US $3.4 million. Alvarez & Marsal is the proposal trustee. Counsel is Osler for the company, Torys for the proposal trustee and MLT Aikins for ESW Holdings.
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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.
Richard Williams of James Williams & Associates alerts readers to new regulations that bring into question whether existing protections under the BIA and model orders are sufficient to protect trustees from liability associated with the inadvertent release of personal information.