Coverage of the latest Canadian insolvency filings, court cases, news and more
The Office de la protection du consommateur has appointed PwC as the administrator for claims filed with the Compensation Fund for Customers of Travel Agents (“CFCTA”) in connection with the COVID-19 pandemic. Travellers who purchased tourism services such as accommodations, cruises, excursions, etc. from a travel agent licensed in Quebec are covered by the CFCTA’s protection. The CFCTA may reimburse tourism services that have been paid for but not received. It may also be used to compensate customers who have had to extend their stay, in particular where their flight has been cancelled.
Penady (Barrie) Ltd (“PBL”), a Toronto, Ontario-based subsidiary of PenEquity Realty, a real estate investment advisor, and PRC Barrie were placed in receivership on March 25 on application by Choice Properties Limited Partnership (“CHP”), the beneficial owner of certain lands abutting real property owned by the companies (the “Barrie Property”). The Barrie Property is approximately 97% occupied, with tenants including Cineplex, Tim Hortons, and McDonald’s. PBL, which has $68.2 million in liabilities, previously entered into a secured credit agreement with CHP to assist it with the development of the Barrie Property. During the course of this agreement, PBL defaulted on several occasions, including by missing payments. Although the agreement matured in January 2020, to date, all principal, interest, and other obligations under the agreement remain outstanding. The current monthly rent collected by PBL is insufficient to service its indebtedness and PBL has tried unsuccessfully to sell the Barrie Property for approximately 18 months. RSM was appointed receiver. Counsel is Osler for the applicant, Gardiner Roberts for the companies and Blaney for the receiver.
Accede Energy Services, a Lacombe County, Alberta-based integrated energy services company that provides oilfield equipment rentals and fire, safety, and medical aid services, was placed in receivership on March 23 on application by Sandton Credit Solutions Master Fund IV, owed approximately $28.8 million. In late 2016 and early 2017, Sandton took assignments of loans to the company from both ATB and Canadian Western Bank. The company had already defaulted on the loans prior to the assignments to Sandton, and additional defaults followed. As a result, and after a third forbearance agreement expired on February 14, 2020, Sandton issued a demand for repayment. FTI was appointed receiver. Cassels is counsel to 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.
James Clark of Stern Landesman Clark reminds trustees that arm’s length parties can have non-arms length dealings and reviews the factors to be considered when attacking commercially unreasonable transactions between these parties.