Ventures West Transport, a Sherwood Park, Alberta-based transportation company specializing in transportation across winter and ice roads in the western provinces, the Yukon and the Northwest Territories, obtained protection under the CCAA on November 29. The company is majority owned by the Tłı̨chǫ government, a First Nations organization that initially invested in the business in 2009. Since the acquisition, however, the Tłı̨chǫ government has had to advance approximately $37.6 million to support the company. The company's most significant contract has been to supply fuel to a mining operation in the Northwest Territories. Recently, the company was unsuccessful in its bid to re-win the contract for a further five-year term, and management projects that without this contract, the company's will report a loss of approximately $9.3 million for the year ending March 31, 2020. Not wanting to risk the destabilization of its other companies, the Tłı̨chǫ government has decided to cut its losses and wind-down the transportation business while under creditor protection. MNP is the monitor. Counsel is McMillan for the company, Cassels Brock for the monitor and Reynolds Mirth Richards & Farmer for CIBC, owed approximately $15.6 million.
Accel Canada, a Calgary, Alberta-based oil and gas company, obtained protection under the CCAA on November 22. The company had previously filed an NOI on October 21. PwC is the monitor. Counsel is Lawson Lundell for the company, BLG for the monitor, Bennett Jones for Third Eye Capital and Stikeman Elliott for Stream Asset Financial.
Clover Leaf Seafoods, a Markham, Ontario-based seafood supplier, obtained protection under the CCAA on November 22. The company is the Canadian affiliate of U.S.-based Bumble Bee, one of North America's best-known consumer shelf-stable seafood companies which commenced Chapter 11 proceedings on November 21. While Clover Leaf's business is cash flow positive and profitable, the balance sheet of the Bumble Bee Group as a whole has suffered under various financial pressures and litigation to which Bumble Bee U.S. is subject. In 2017, the company pleaded guilty to price fixing and was fined US $25.0 million. Civil litigation was also launched against the company by major grocery chains such as Walmart and Kroger. While under creditor protection, the group will launch a stalking horse sales process for the business. Alvarez & Marsal is the monitor. Canadian counsel is Bennett Jones for the company, Osler for the monitor, Blakes for the ABL Agent and ABL DIP Agent, Davies for the stalking horse purchaser, Goodmans for the Term Agent and DIP Term Agent and Torys for the company's private equity sponsor, Lion Capital.
North American Fur Auction, an international fur auction house with a history dating back to 1670 and the historic Hudson's Bay Company, obtained protection under the CCAA on October 31. Based in Toronto, the company sells in excess of USD $200.0 million worth of fur products annually at the auctions it conducts. The company also lends funds to farmers/ranchers who use the loans to fund the development of minks. The farmers are then contractually bound to deliver those mink to NAFA for auction. The annual lending cycle ends around the end of November. Thereafter, the mink are harvested and turned into pelts for auction. Historically, the company has bridged the gap between lending and harvest with funds from a syndicate of lenders led by CIBC. The credit facilities typically range from $40.0 to $60.0 million, depending on the time of year. The syndicate made demand in the summer of 2019, however, and ultimately stopped funding in late September. Facing a looming liquidity crisis, the company negotiated an LOI with SAGA Furs, one of its principal competitors, to acquire certain of its loans. The proceeds from this transaction, along with DIP funding in the CCAA proceedings, will allow the company to harvest its current mink crop and thereafter reconsider its business operations. Deloitte was appointed monitor. KPMG is financial advisor to the company. Alvarez & Marsal is financial advisor to CIBC. Waygar Capital is providing a $5.0 million DIP loan. Counsel is Blaney McMurtry for the company, Miller Thomson for the monitor, TGF for BDC, Blakes for CIBC and Aird & Berlis for Waygar Capital.
9227-1584 Quebec Inc., and 9336-9262 Quebec Inc., two related companies that are developing Square Candiac, a complex and multifaceted mixed-used construction and development project on approximately 45 acres of land on the south shore of Montreal, Quebec, obtained protection under the CCAA on November 22. While some aspects of the project have been completed, the companies have no immediate liquidity and progress on the project has stalled. A shareholder dispute led to the appointment of KPMG as administrative agent and manager of the companies. Upon its appointment, KPMG determined that the companies were insolvent and required interim financing and a stay of proceedings to effect a restructuring or a continuation of the company's operations and made an application for creditor protection on the companies' behalf. KPMG is monitor and has been granted additional powers to manage the project. Counsel is Blakes for the monitor, Dentons for one of the project's co-owners, Langlois for the other co-owner, Jolicoeur Lacasse for BDC and BLG for Gerpro Construction.
DEL Equipment, a Newmarket, Ontario-based truck body builder and truck equipment upfitter, filed for protection under the CCAA on October 22. Operating nation-wide from six manufacturing and distribution locations, the company is currently facing a liquidity crisis and is in significant arrears to many of its suppliers. In June 2017, Gin-Cor Industries, a company that operates in the same field, acquired a 40% equity stake in DEL and assumed management control of the company. The majority of the anticipated business synergies failed to materialize, however, and in July 2018 the transaction was terminated and control of the business reverted back to DEL's previous sole shareholder. Despite this, the company's operational challenges have continued, and DEL is now more than $8.0 million in arrears to its supplier base, many of whom have begun to compress payment terms. Adding to this, the company has become embroiled in a payment dispute; a customer inadvertently remitted approximately $874.1 thousand to Gin-Cor instead of DEL and Gin-Cor is now refusing to return the funds. While under creditor protection, the company will seek to resolve the payment dispute. It also will attempt to complete a going-concern sale of the business or a restructuring transaction. MNP was appointed monitor. Counsel is Goodmans for the company and GSNH for the monitor.
Forever XXI ULC, the Canadian operating subsidiary of US-based retailer Forever 21, obtained protection under the CCAA on September 29. The filing occurred on the same day the company's parent filed for Chapter 11 bankruptcy protection in the US. In Canada, the company operates 44 retail stores in malls across the country, selling apparel, accessories and other products under the Forever 21 and other related brands. While the company's initial expansion into the Canadian market in 2001 was promising, it has struggled to maintain profitability, and the vast majority of its stores are unprofitable. As part of its global restructuring plan, Forever 21 has determined that it will exit substantially all of its international markets, including Canada. Following a pre-filing bid solicitation process, the company selected Gordon Brothers and Merchant Retail Solutions to jointly conduct an orderly liquidation of the Canadian inventory and other assets. PwC was appointed monitor. Alvarez & Marsal is the company's financial advisor. Counsel is Osler for the company, Goodmans for the monitor, Norton Rose Fulbright for lender J.P. Morgan Chase, Cassels Brock for Gordon Brothers, Torys for Cadillac Fairview and Gardiner Roberts for Oxford Properties.
Bellatrix Exploration (TSX: BXE), a Calgary, Alberta-based oil and gas company, obtained protection under the CCAA on October 2. Facing declining revenues and increasing liquidity challenges as a result of prolonged difficult market conditions, the company made several attempts to improve its capital structure. In June 2019, the company completed a recapitalization transaction pursuant to a CBCA plan of arrangement that, among other things, reduced its debt obligations by approximately $110.0 million. Despite this, commodity prices have slid lower in the last several months, resulting in a near term liquidity crisis. In light of these challenges, the company sought creditor protection to provide stability for the business, additional time to pursue a sale and investment solicitation process and time to advance potential restructuring alternatives. The CCAA proceedings will also give the company access to much needed interim financing. PwC is the monitor. Counsel is Goodmans for the company and BLG for the monitor.
Energold Drilling, a Vancouver, British Columbia-based drilling contractor, obtained protection under the CCAA on September 13. Operating in 25 countries, the company's revenues have been adversely impacted by the deterioration of the markets it serves - in particular, the general downturn in mining that commenced in or around 2012 and the subsequent general downturn in oil and gas that commenced in or around 2014. While conditions in the mining sector have shown some signs of improving in recent years, neither the mining or energy sectors have recovered to their previously robust levels of activity. The company's restructuring plan includes reducing its debt load, cutting costs in its corporate office, selling non-core assets and refocusing attention to its remaining operating units. FTI was appointed monitor. EY was appointed financial advisor to the company. Portage Point Partners was appointed CRO. Counsel is BLG for the company, Cassels Brock for the monitor, Gowling WLG for EDC, Clark Wilson for Extract Advisors LLC as administrative agent to the secured noteholders, McCarthy Tétrault for RBC and Stikeman Elliott for the DIP lender.
Stornoway Diamond (TSX-SWY), a Montreal, Quebec-based diamond mining company that owns and operates Quebec's first and only diamond mine, obtained protection under the CCAA on September 9. Construction of the company's mine in Northern Quebec commenced in 2014, funded by a $946.0 million financing package that included equity, senior and convertible debt, equipment financing and the world's first ever diamond stream. The project was heavily supported by the Quebec government, which considered the mine an integral component of its "Plan Nord" initiative to enable development of the northern part of the province and its local communities. Commercial production commenced in 2017, but the mine's performance fell significantly short of expectations as a result of delays in the ramp-up of the mine, lower grade ore, and higher-than-anticipated levels of diamond breakage. Adding to the company's difficulties was a declining price for rough diamonds. When production commenced, the market price was US $147/carat. By the second quarter of 2019, the price was only US $76 / carat. Unable to operate profitably under its current conditions, and with no additional liquidity available, the company concluded that it had to restructure its balance sheet and launched a sale and investment solicitation process in April 2019. The process led to a proposed transaction with certain of the company's existing stakeholders, which the company will attempt to complete while under creditor protection. Deloitte was appointed monitor. Counsel is Norton Rose Fulbright for the company, Osler for the monitor, McCarthy Tétrault for Investissement Québec and Diaquem and Fasken for the Caisse.