Coverage of the latest Canadian insolvency filings, court cases, news and more
Flexcavators Canada, a Calgary, Alberta-based distributor of innovative excavation equipment and accessories, filed for bankruptcy on June 17, listing $487.0M in liabilities, including $115.6M to BDC. Grant Thornton is the bankruptcy trustee.
Station Point Developments, a company developing and constructing a 112 unit rental residential apartment in Edmonton, Alberta, was placed in receivership on June 17 on application by Kingsett, owed approximately $11.9MM. Construction of the project commenced in 2016 but has been plagued by a host of problems including being behind schedule, cost overruns, builders’ liens being registered against the property and a litigious dispute between the developer and its general contractor, Fortis LGS Structures. The company was unable to repay its loan to KingSett when it matured in February 2019 and KingSett is unwilling to fund the estimated $6.9MM that is required to complete the project without the appointment of a trustee who has the ability to obtain construction advances from KingSett on a secured and first priority basis. KSV was appointed receiver. Counsel is McCarthy Tétrault for the applicant and Bennett Jones for the receiver.
Paserium Corporation, owner of a series of condominium units in a mixed retail/commercial/residential project in Calgary, Alberta, was placed in receivership on June 13 on application by RBC, owed approximately $7.4MM. After a series of defaults in 2018, RBC intended to proceed by way of a foreclosure proceeding but soon realized that this alone would be insufficient to adequately protect the bank’s security. Shortly after listing the properties for sale, RBC learned that the condominium was facing significant building repair issues. Additionally, one of the condo units that Paserium owns has been subdivided into approximately 70 rooms and is operated by Paserium as a business centre with shared office services and staff. RBC therefore decided that it would be best to appoint a receiver that could serve on the condo board and evaluate, and potentially operate, the business centre while the units were marketed for sale. Grant Thornton was appointed receiver. BLG is counsel for the applicant.
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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.
BIA and CCAA amendments: 2019 Federal Budget proposes to legislate on good faith requirements, directors’ duties and corporate disclosure obligations
Ari Sorek of Dentons summarizes the amendments that are in the works for the BIA and CCAA which will statutorily entrench the duty of good faith, widen the scope of directors’ potential liability and augment financial disclosure and transparency