Coverage of the latest Canadian insolvency filings, court cases, news and more
Strategic Oil & Gas (TSX-V: SOG), a Calgary, Alberta-based junior oil and gas company, along with its wholly owned subsidiary, Strategic Transmission, obtained protection under the CCAA on April 10. Focused primarily on oil and gas development in Northern Alberta, the company cites several key factors that have led to its current financial position, including deteriorating differentials on Canadian oil prices and political uncertainty with respect to pipeline approvals at the Federal level. In June, 2018, the company entered into a transaction to sell certain of its assets. Despite the sale closing, however, the proposed purchaser was unable to meet the Liability Management Ratio requirements of the Alberta Energy Regulator to facilitate the necessary license transfers. As a result, Strategic was forced to unwind the transaction, further weakening its financial position. With no capital available to fund further development and drilling improvements, the company will look to complete a sale and investment solicitation process while under creditor protection. KPMG was appointed monitor. Counsel is Dentons for the applicant and Torys for the monitor.
Mundo Media, a Richmond Hill, Ontario-based advertising technology company that offers mobile marketing expertise to its customers, was placed in receivership on April 9 on application by RBC, owed approximately CAD $43.6MM and USD $25.7MM. Employing approximately 45 employees across Canada, the US and Luxembourg, the company has been experiencing declining revenue in the past year as result of, among other things, increasing scrutiny on the online advertising industry and Facebook’s deletion of over 1.5 billion fake accounts, which has reduced the activity that leads to revenue generation for the company. RBC provided time for the company to find a solution to its liquidity constraints, but after months of effort, the company’s best option was a letter of intent for the sale of the business which would see the bank incur a significant shortfall. EY was appointed receiver. Counsel is TGF for the applicant and Norton Rose Fulbright for the company.
Unison Construction Management, a Vancouver, British Columbia-based construction company, filed for bankruptcy on April 5. listing $9.2MM in liabilities, including $739.1M to BMO. The company’s portfolio of commercial design-build projects include MNP’s Vancouver offices at 1021 West Hastings Street. Grant Thornton 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.
Michael Nowina and Ben Sakamoto of Baker & McKenzie review a recent appeal involving the intersection of bankruptcy law and the doctrine of subrogation.