YG Limited Partnership and YSL Residences Inc., which are part of the Cresford Group of Companies ("Cresford") and are the owner/developer of the condominium project known as Yonge Street Living Residences (the "YSL Project"), at the intersection of Yonge Street and Gerrard Street in Toronto, filed NOIs on April 30. YG Limited Partnership lists approximately $64.1 million in liabilities, including $111.8 million to Westmount Guarantee, and YSL Residences Inc. owes approximately $106.8 million to Timbercreek Mortgage Servicing Inc. The YSL Project, which is currently subject to three mortgages totalling $249 million, has been suspended for more than a year due to ongoing financial difficulties of the companies and Cresford. If the NOI proposal is implemented, Concord Properties Development Corp. or its affiliate would become the owner/developer of the YSL Project. KSV Advisory is the proposal trustee. Counsel is Aird & Berlis for the companies, Davies for the proposal trustee, and Bennett Jones for the Concord Properties Development Corp.
International Fitness Holdings Inc., International Fitness Holdings LP, and World Health North LP (collectively, the “Company”), which operates 21 fitness clubs, as well as spin and CrossFit studios, in Calgary and Edmonton, filed an NOI on April 23, 2021. As at March 31, 2021, the company owed approximately $72.9 million to its two main secured lenders, CIBC and Trifit Holdings (GP) Ltd. (the company's general partner). Subsequent to the Alberta Government’s decision to increase COVID-related restrictions, the Company closed all its clubs and laid off a significant number of employees in mid-March 2020 and implemented a number of strategies to attempt to safeguard the longer-term operations including negotiating rent deferrals with landlords and accessing the Canada Emergency Wage Subsidy and the Canada Emergency Commercial Rent Assistance and Canada Emergency Rent Subsidy programs. In September of 2020, the Company engaged MNP to lead a strategic process, including a sale of the Company’s assets. This culminated in an asset purchase agreement being entered into between the Company and an arm's-length purchaser that will be finalized while the Company is under creditor protection. KPMG was appointed as proposal trustee. Counsel is Osler for the proposal trustee.
Spartan Bioscience Inc., a Nepean, Ontario-based biotechnology company that developed a rapid COVID-19 testing device, filed an NOI on April 5, listing approximately $73.0 million in liabilities. The company filed for insolvency protection after finding an undisclosed problem with the technology and pausing shipments of its COVID-19 testing cube. The company is laying off 60 employees (around 70% of its workforce) and working to restructure and refine the performance of the COVID-19 test in the field. EY is the proposal trustee.
193069 Canada Inc., a Montreal, Quebec-based company in the business of designing, importing and supplying unique fabrics printed on various materials to North American clothing manufacturers, filed an NOI on March 23, listing approximately $7.9 million in liabilities, including $3.6 million to Fabtrends International Holdings Inc. and $1.0 million to Fabtrends USA Corp. Prior to the COVID-19 pandemic, several large retailers of women's dresses had closed or downsized considerably, including Dress Barn and Sears. These retailers represented a significant portion of the company's business and it was unable to recover these lost sales. Moreover, the pandemic led to a sharp decrease in the demand for women's dresses and formalwear. For the year ended June 30, 2020, sales were 27% lower as compared to the prior year. Although the company implemented various cost reduction initiatives, the costs savings were insufficient to offset the impact of the lower sales volume. On March 26, the Court also authorized a sale and solicitation process for the company's business and related assets. PwC is the proposal trustee. Kugler Kandestin is counsel for the company.
Drexler Construction Limited ("Drexler"), Folmur Construction (2004) Ltd. ("Folmur"), and Down Under Pipe and Cable Locating Ltd. ("Down Under"), three construction companies, filed NOIs on March 18. Drexler and Down Under, which operate from premises in Rockwood, Ontario, respectively list approximately $8.3 million and $2.1 million in liabilities. Folmur, which operates from leased premises in Guelph, Ontario, lists approximately $3.2 million in liabilities. The companies are all indebted to RBC, each as a borrower under a number of credit facilities and as a guarantor of the other two companies' obligations to RBC. The COVID-19 crisis has had a general adverse impact on the companies' costs and their ability to complete various municipal jobs. The companies also suffered two unusual and isolated financial setbacks in 2020, being (1) a loss on a job due to an estimator's error and (2) a CRA interest charge. Before filing the NOIs, the companies were in discussions with RBC about possible arrangements to forbear on the demands. However, the parties were unable to come to a mutually agreeable arrangement. During these proceedings, the companies will be receiving up to $1.5 million in DIP financing from Corwin Mortgage Capital Inc. Albert Gelman is the proposal trustee. Counsel is GSNH for the companies, Macdonald Sager Manis for the proposal trustee, and Aird & Berlis for RBC.
GS ER Canada Inc., a Calgary, Alberta-based energy exploration and production company, filed an NOI on March 11, owing approximately $4.3 million in unsecured liabilities to the BC Oil and Gas Commission. The company attributes its financial difficulties to a variety of factors, including: (1) significant reductions in oil and gas prices and commodity demand caused in part by the effects of the COVID-19 pandemic; (2) declining production rates due to a lack of capital investment; and (3) the inability to undertake certain repairs due to lack of funds. Since 2019, the company has attempted to restructure its financial affairs and made several attempts to sell the company. However, these efforts were unsuccessful, as previous potential purchasers failed to close the transaction. MNP, which was appointed proposal trustee, has engaged Sayer Energy Advisors to carry out a proposed SISP for the company's assets. Counsel is Stikeman Elliott for the company and Lawson Lundell for the proposal trustee.
Change of Scandinavia Canada Retail Inc., a Montreal, Quebec-based privately-held retailer which currently operates 26 stores across Canada under the name CHANGE Lingerie (the "Brand"), filed an NOI on March 2, listing approximately $4.1 million in liabilities, including $2.0 million to RBC. The Brand was founded in 2006 in Denmark and has over 200 stores worldwide. This NOI only pertains to the Canadian entity. Given the COVID-19 environment and impact on the retail sector, the company has suffered significant losses and a major reduction in sales. The company is currently looking to restructure its operations, which may include the closure of certain points of sale. Richter is the proposal trustee. Counsel is Kugler Kandestin for the company and Norton Rose Fulbright for the proposal trustee.
Rockshield Engineered Wood Products ULC, a Cochrane, Ontario-based manufacturer of plywood used to make a variety of products including furniture and cabinetry, filed an NOI on February 8, listing approximately $15.1 million in liabilities, including $2.9 million to BNS. Due to the seasonal variations in logging roads and poor transport truck access during the warmer months, the company purchases the majority of its raw materials in the winter. During the winter months, the company stockpiles approximately $100.0 thousand worth of logs per week over and above its manufacturing needs. Since the company's expenses during the stockpiling period exceed its revenue from operations, it has historically financed this "bulge" with capital from shareholders. This year, however, the company's shareholders have declined to extend financing for the bulge. In addition to the company's pending liquidity crisis, BNS has issued a demand on its credit facilities, asserting a breach of a debt service ratio covenant. During these proceedings, BNS is providing DIP financing to the company. Dodick & Associates is the proposal trustee. Counsel is Weisz Fell Kour for the company, Pallett Valo for the proposal trustee and Miller Thomson for BNS.
Tradesmen Enterprises Limited Partnership ("TELP"), a Calgary, Alberta-based limited partnership that provides general mechanical contracting and pipeline construction, assembly, and maintenance throughout Western Canada — along with its general partner, Tradesmen Enterprises Inc. (together with TELP, "Tradesmen") — filed NOIs on February 1. Tradesmen lists approximately $47.7 million in liabilities and $52.5 in assets. Until January 11, 2021, Tradesmen's principal contract was for the construction of a water management project for Teck Coal Limited (the "Project"). The Project was massively over budget, with the final projected cost of completion being more than four times the original budget of $32.0 million. In the course of Tradesmen's work on the Project, Teck Coal Limited also consistently delayed payment, which had a negative impact on Tradesmen's cash flow and its ability to pay subcontractors. Teck Coal Limited, which currently owes Tradesmen approximately $50.0 million, purported to terminate the contract on January 11, 2021. As a result, Trademen's only alternative was to seek court protection by filing the NOIs. KSV Restructuring is the proposal trustee. Counsel is Bennett Jones for the proposal trustee, Lawson Lundell for Tradesmen, and BLG for BMO, the senior lender.
Allied Track Services Inc., a Grimsby, Ontario-based provider of railroad construction, maintenance, and signal services throughout Canada, filed an NOI on January 21. The principal purpose of the restructuring proceedings is to create a stabilized environment to allow the company to enter a transaction for the sale of its business and assets through a “stalking horse” sale and investor solicitation process. KSV Advisory is the proposal trustee. Counsel is Bennett Jones for the company, Blakes for the proposal trustee and Chaitons for the DIP lender.