GTA Plumbing Limited ("GTA"), a family-owned and operated business that provides a variety of plumbing services in the Greater Toronto Area, including residential, commercial and construction type projects, filed a Proposal to its creditors on January 18, with total liabilities of approximately $2.1 million. GTA found itself indebted to CRA due to a variety of factors, including mismanagement, alleged misappropriation of corporate funds, medical issues suffered by the principal and the COVID-19 pandemic restrictions that took hold in 2020. GTA identified the need to seek a settlement with its creditors. BDO is the Proposal Trustee. By Dina Milivojevic
Gain Energy Ltd., a Calgary, Alberta-based privately-owned company whose assets consist of producing oil and gas properties in Alberta, Saskatchewan, and British Columbia, filed a Division I Proposal (the "Proposal") on March 8. The company sold substantially all of its oil and gas assets and repaid its senior secured debt in September 2020. The Proposal applies to all affected creditors, whether or not any such affected creditor proves a claim against the company under the Proposal. KPMG is the proposal trustee.
Nabis Holdings Inc. (CSE:NAB), a Canadian investment issuer that invests in high quality cash flowing assets across multiple industries, including real property and all aspects of the U.S. and international cannabis sector, filed a proposal on November 23 after entering into a support agreement with certain holders of the company's outstanding unsecured convertible debentures in the amount of $35.0 million. Pursuant to this support agreement, the holders have agreed to support a recapitalization plan for the company which will be implemented pursuant to a BIA proposal. Previously, the company announced that Odyssey Trust Company commenced legal action against the company alleging a breach of the terms of the debentures as a result of a missed interest payment. In light of the company's liquidity constraints, the company believes that the recapitalization, including the proposal and support agreement, are in the best interest of the company and its stakeholders. KSV is the proposal trustee. Counsel is McMillan for the company, Bennett Jones for the debenture holders and Chaitons for the proposal trustee.
Encore Vineyards Ltd., the last of a group of wineries built under the full stewardship of the late Harry McWatters, best known as the founder of Sumac Ridge Estate Winery and See Ya Later Ranch, and the founding chairman of VQA Canada, BC Hospitality Foundation, and BC Wine Institute, filed a proposal on May 7, listing approximately $18.0 million in liabilities, including $5.0 million owed to BMO. In July 2018, the company opened the TIME Winery & Kitchen in Penticton, British Columbia, with a 15,000 square foot facility offering a tasting bar, a lounge, and an outdoor patio for customers. In recent years, the company has not been profitable, with losses attributable to significant delays and cost overruns in the construction of its premises, large carrying costs on debt and higher than expected marketing costs, as well as factors outside of the company's control such as the Alberta wine boycott and forest fires impacting tourism. The company has completed a sales process and a transaction is contemplated in the proposal whereby a purchaser will pay $5.8 million for the assets of the company upon court approval of the proposal. BDO is the proposal trustee. Counsel is Fulton & Company for the company and Lawson Lundell for BMO.
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, 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, 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, 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.