Coverage of the latest Canadian insolvency filings, court cases, news and more
Safety Seal Plastics
Safety Seal Plastics, a Guelph, Ontario-based supplier of shrink sleeve labels and other specialty printed products to the sports nutrition, craft beer, food and other industries, was placed in receivership on August 7 on application by HSBC, the company’s secured lender. The company also received a $1.5MM loan from BDC as well as equipment financing from RBC and Hewlett-Packard Financial Services Canada. In January 2018, Deloitte was retained as financial consultant to HSBC and determined that the company was out of margin on its credit facilities by approximately $1.1MM. The company’s board of directors had also discovered that the company’s then-president had repeatedly provided them and the shareholders with misleading financial information, documents and statements, and had misappropriated company funds for personal purposes and caused the company to enter into various transactions with parties related to him. These dealings contributed to the company’s current liquidity crisis. In February 2018, the company ended its relationship with this individual, and, while under a forbearance agreement, sought to effect a refinancing or investor transaction. The process led to the company entering into a letter of intent for Labelink Products to acquire substantially all of the company’s assets pursuant to a receivership proceeding. Deloitte was appointed receiver. On the same date, the court approved the transaction with Labelink. Counsel is TGF for the applicant, Chaitons for the company, Goldman, Sloan, Nash and Haber for Deloitte and Aird & Berlis for RBC.
Charcuterie Parisienne
Charcuterie Parisienne, a Montreal, Quebec-based charcuterie maker, filed an NOI on August 6, listing $748.3M in liabilities. In 2016, the company recalled four of its cured meat products due to a possible listeria contamination, and in December 2017, the Canadian Food Inspection Agency suspended the company’s operating license. KPMG is the proposal trustee.
Union Waterfront
Union Waterfront, a Richmond Hill, Ontario-based corporation that owns two real properties located at 12 Lakeport Road and 16 Lock Street in St. Catharines, Ontario, was placed in receivership on August 3 on application by FirstOntario Credit Union, who provided the company with a $10.0MM business loan. On June 12, FirstOntario issued a formal demand on the company for payment of all outstanding indebtedness under the loan. The company failed to comply with this demand and did not offer any proposal to FirstOntario. msi Spergel (ICIN) was appointed receiver. Counsel is Scarfone Hawkins for the applicant and Simpson Wigle Law for the receiver.
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Buzzell v Conway Visions Inc., 2018 BCSC 1021
Can an undischarged bankrupt commence litigation?
Jonathan Solursh on the role of a CRO
In a restructuring, time is more valuable than money. This is the key advice of Jonathan Solursh, who, with his team at R.e.l. group inc., has acted as Chief Restructuring Officer (CRO) in many complex restructurings. Here, he gives us an inside look at the role of a CRO and the key part it can play when a company is in a distressed situation.
A Comprehensive Analysis of Transfers at Undervalue under Section 96 of the BIA – Part 4
Michael Myers of Papazian Heisey Myers wonders why, in at least one recent decision, the Ontario Superior Court refused to even look at the Transfer at Undervalue provisions in the BIA and permitted a spouse to retain her share of a matrimonial home that was given to her for no consideration by a debtor less than one year before the debtor’s petition into bankruptcy, stressing that Section 96 of the BIA does not differentiate between ‘family assets’ and ‘non-family assets.’
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