Acier Orford

Acier Orford, a Sherbrooke, Quebec-based company specializing in the manufacturing and installation of reinforcing steel and wire mesh, filed a proposal to its creditors on August 16. In March 2019, it was discovered that the company's accounts receivable included invoices for future work and extras on projects that had not yet been approved. It was also discovered that the company's inventory had been overstated. In May 2019, two of the company's senior lenders, BDC (owed $1.8 million) and TD (owed $9.8 million), issued demands for repayment. In response, the company has put together a restructuring plan that will see Groupe Dallaire, a supplier and major business partner, take over the company. The restructuring will see the company's secured lenders take a discount on their loans, and a basket payment of $200.0 thousand is being offered to the company's remaining unsecured creditors. PwC is the proposal trustee. Counsel is Serge Dubois for the company, McCarthy Tétrault for the proposal trustee, Fasken for TD, BLG for BDC and Langlois Avocats for Groupe Daillaire.

Toonbox Entertainment

Toonbox Entertainment, a Toronto, Ontario-based animation studio, filed a proposal on April 29. Established in 2008, the company has produced award-winning movies and television shows such as The Nut Job and The Nut Job 2. The Nut Job 2, which was produced through a wholly-owned subsidiary of Toonbox, was eligible to claim certain provincial and federal refundable tax credits for the production of the film. These tax credits were used by the production company to secure funding from the Pacific Mercantile Bank, with Toonbox acting as a guarantor of the facility. When the production company failed to remit to Pacific Mercantile the approximately $7.5MM it received on account of the tax credits, the lender brought an application for the appointment of an interim receiver. BDO was appointed interim receiver on April 18. The company subsequently filed a proposal on April 29, with BDO acting as proposal trustee. Under the terms of the proposal, the assets of the company will vest in the trustee, who will conduct a sale process for the assets. Counsel is Bennett & Company for Toonbox, Cassels Brock for Pacific Mercantile and Zener & Waxman for the proposal trustee.

RMK Investments

RMK Investments, a Vancouver, British Columbia-based company that sells and installs the Hunter Douglas brand of home interior blinds and custom-made draperies which were sold exclusively through the Hudson's Bay ("HBC") Department stores, filed a proposal on January 21, listing $882.6M in liabilities, including $307.5M to Hunter Douglas Canada. Under the terms of its contract with HBC, the company was not allowed to perform any of its own direct marketing to customers. Previously, the company had the advantage of selling the Hunter Douglas brand of blinds which were not available to much of the competition. This allowed the company to operate its business on a high volume and high margin basis. In the past several years, however, big box retailers such as Costco and Home Depot also began to sell the Hunter Douglas brand of blinds. The increased competition and existing marketing constraints on the company reduced its margins, ultimately resulting in negative profitability. The company will cease operations on January 31. The Bowra Group is the proposal trustee.

First Access Funding

First Access Funding, an Ontario and Alberta-based privately held finance company that specializes in the origination and servicing of non-prime auto loans, filed a proposal on July 27, listing approximately $50.MM in liabilities. The company helps its customers establish or re-establish credit through non-traditional auto financing, and provides lending through dealerships across several provinces. Grant Thornton is the proposal trustee. Counsel is Foglers for the company and BLG for the proposal trustee.

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