Pure Global Cannabis (TSXV:PURE), which is engaged in the production and sale of cannabis products in Canada with its subsidiaries (collectively, "Pure Global Group"), obtained protection under the CCAA on March 19. Pure Global Group's primary assets are two real properties in Brampton, Ontario owned by its subsidiaries, 237A Advance and 237B Advance, on which the group's production and warehouse facilities are located (the "Brampton Properties"). In 2018, the company and its primary operating subsidiary, PureSine, issued secured debentures and entered into a collateral agency agreement with Cancor Debt Agency. A year later, the group's precarious liquidity situation caused it to miss a payment that was due under the debentures that the company had issued to certain debenture holders. The group also defaulted on its vendor take back-mortgages for the Brampton Properties. Without a stay of proceedings and interim financing, Pure Global Group will face a complete cessation of its operations. During the CCAA proceedings, Hillmount Capital will be providing DIP financing. EY was appointed monitor. Counsel is Weisz Fell Kour for the company, Osler for the monitor, Cassels for 2056706 Ontario in respect to 237A Advance, Keyser Mason Ball for Kozo Holdings in respect to 237B Advance, McMillan for Cancor Debt Agency, and Fred Tayar & Associates for Hillmount Capital.
Spectra Premium Industries, a Boucherville, Quebec-based company that specializes in the design, manufacturing, and distribution of cooling systems and other automotive products, together with several of its subsidiaries (collectively, the "Spectra Group"), obtained protection under the CCAA on March 10, listing approximately $249.0 million in liabilities, including $102.9 million to Wells Fargo and $20.7 million to Laurentian Bank. Over the past few years, the Spectra Group has seen a progressive reduction of its profitability. For the year ended January 31, 2020, the Spectra Group suffered a loss of more than $13.0 million. The group attributes its financial difficulties primarily to a shift in customer demand towards aftermarket products that are cheaper; an oversupply of certain products in the US market and increased costs as a result of the tariffs imposed on goods imported from China. EY was appointed monitor. Counsel is Norton Rose Fulbright for the monitor, Lavery, de Billy for the Spectra Group, Bennett Jones and Fishman Flanz Meland Paquin for Wells Fargo, and McCarthy Tétrault for Laurentian Bank.
Senvion GmbH, a German manufacturer and seller of wind turbine equipment and technology with global operations including in Canada, had its German insolvency proceedings recognized in Canada under the CCAA on February 26. In April 2019, the company filed for insolvency in Hamburg under the German equivalent of debtor in possession restructuring proceedings. With the bulk of its business having been sold, the company has now moved into a liquidation phase where it is incumbent upon management to realize the value in the remaining assets. The company has asked for Canadian recognition of the German proceedings so that creditors will have access to the German claim process. Fuller Landau was appointed as information officer. Counsel is Spark for the company and Gardiner Roberts for the information officer.
2607380 Ontario, which is in the business of developing and operating a multi-purpose commercial building located at Burlington, Ontario (the "Nuvo Building"), obtained protection under the CCAA on February 26, listing approximately $27.6 million in liabilities, including $17.3 million to Meridian Credit Union and $4.5 million to Crossroads Christian Communications ("CCCI"). In November 2017, the company entered into an agreement with the general contractor, Maple Reinders, to renovate the Nuvo Building. However, in 2019, the renovation schedule began to incur significant delays when Meridian refused to fund the promised additional $2.0 million required to complete renovations. Consequently, the company was unable to pay Maple Reinders, who in turn could not make payments to its subcontractors. As of September 2019, all work at the Nuvo Building has ceased. The company currently requires the flexibility and breathing room provided by the CCAA process to pursue additional renovation financing and restructuring options that would allow for the completion of renovations to the Nuvo Building. Maynbridge Capital will be providing DIP financing during the CCAA proceedings. Richter was appointed monitor. Counsel is Stikeman Elliott for the company, Bennett Jones for the monitor, Gowling for Meridian, McCarthy Tétrault for Maynbridge Capital, and Weirfoulds for CCCI
Pier 1 Imports, a leading American retailer of home décor and accessories with 65 stores in Canada, had its US Chapter 11 bankruptcy recognized in Canada under the CCAA on February 18. Due to a challenging retail environment and certain strategic missteps under past management, the company experienced a decline in its performance, including substantial declines in revenue as well as operating losses and net losses. As of November 2019, the total liabilities of the company and seven of its subsidiaries were approximately $1.3 billion (USD). Moving forward, the company has decided to close all of its Canadian locations by the end of March 2020 as part of its overall restructuring, with Gordon Brothers handling the liquidation. The company will receive up to $256.0 million in DIP financing to continue its US operations during the Chapter 11 proceedings. Alvarez & Marsal was appointed information officer. Counsel is Osler for the company, Stikeman Elliott for the information officer Norton Rose Fulbright for the DIP senior credit facility lenders and Cassels for Gordon Brothers.
Invictus MD Strategies (TSX-V: GENE), a Vancouver, British Columbia-based cannabis company, along with certain other related companies, obtained protection under the CCAA on February 13. Several factors contributed to the company's liquidity issues. First, it was unsuccessful in obtaining additional financing to complete a custom-built cultivation facility. Second, the strains of cannabis that are currently being harvested by Acreage - the company's primary operating entity - are not in demand as they do not have sufficient potency. While Acreage is currently in the process of changing over its plants to those with a higher level of potency, these plants will not be ready to harvest until mid-April 2020. Finally, the company's revenues have decreased due, in part, to lower consumer demand and market saturation. The company currently owes approximately $10.6 million to ATB Financial and $5.3 million to Authentic Brands, a New York-based brand management company. PwC was appointed monitor. Counsel is Cassels for the company, BLG for the monitor and Blakes for ATB.
Ontario Graphite, a privately-owed Canadian mining company engaged in the re-commissioning and operation of a mining property near Kearney, Ontario, obtained protection under the CCAA on February 12 on application by Orionis, owed approximately $15.0 million (USD). Since at least September 2015, the company has been suffering from operational and liquidity issues. Orionis subsequently advanced funds to the company pursuant to three secured notes. While Orionis has worked collaboratively with the company for several years to resolve its financial and liquidity issues, Orionis is no longer prepared to fund the company outside of a court-supervised process. The company will be able to borrow up to a maximum of $2.8 million in DIP financing from Orionis while it runs a sale and investment solicitation process. Deloitte was appointed monitor. Counsel is Osler for the applicant, BLG for the monitor and Miller Thomson for the company.
1034179 B.C. Ltd., a British Columbia-based developer of a 66-unit rental property in Maple Ridge, British Columbia, obtained protection under the CCAA on February 4, listing approximately $22.0 million in liabilities, including $6.3 million to Canadian Western Bank. In April 2017, the company purchased the Maple Ridge property and began development with $3.8 million of purchase financing from its subordinate lenders. It was contemplated that construction would finish at the end of June 2018. By the fall of 2017, however, the company realized that construction was taking longer and costing more than initially anticipated. In the beginning of 2018, the company managed to secure an additional loan from its subordinate lenders as well as from CWB in order to complete construction of the property. Shortly after these financings, it became clear that the company could not complete construction or meet the monthly interest payments under its loan agreement with the subordinate lenders. In September 2019, CWB ceased to advance funds to the company and demanded payment for $6.3 million. The company proposed to CWB that it would seek relief under the CCAA so that interim financing could be obtained to complete construction of the development for the benefit of all stakeholders. The Bowra Group was appointed monitor. Fasken is counsel to the company.
Rebuts Solides Canadiens, a Montreal, Quebec-based waste disposal company, along with certain other related companies, obtained protection under the CCAA on February 3, attributing its liquidity issues primarily to the decline in the recyclable materials industry. In particular, as a result of China's new recycling ban, the value of recycled materials has dropped dramatically in recent years. The price per ton of mixed paper fell from $121 in mid-2017 to $34 in November 2019. The Quebec government has authorized a $7.0 million loan to the company. The Ministry of Sustainable Development, Environment, and Fight Against Climate Change will provide $5.0 million, while RECYC-QUÉBEC will provide the remainder of the loan. PwC was appointed monitor. Fasken is counsel to the company.
SFP Canada, a Mississauga, Ontario-based company that operates 76 retail stores across Canada under the Papyrus, Carlton Cards, and Paper Destiny brand names, filed for protection under the CCAA on January 23, listing approximately $11.8 million in liabilities. The company is owned by Schurman Fine Papers ("SFP", and together with SFP Canada, the "Schurman Group"), the leading privately held American retailer of personal expression products in North America. American Greetings Corporation previously supplied the majority of products sold by the Schurman Group. In the past few years, the Schurman Group has faced various liquidity pressures caused by, amongst other things, the general downturn in the brick-and-mortar retail industry; the decline in the value of the Canadian dollar since 2009; and a significant price increase in American Greetings' products. As a result of these financial challenges, the Schurman Group fell behind on payments to American Greetings, and American Greetings terminated their agreements in December 2019. The Schurman Group can no longer operate as a going concern. On January 22, SFP filed for Chapter 11 bankruptcy in the US. Similarly, SFP Canada cannot continue operating without the full support of its US affiliates, on whom the company is entirely dependent. Richter was appointed monitor. Canadian counsel is Osler for SFP Canada, Stikeman Elliott for the monitor, and Blakes for American Greetings.