Our summaries of recent Canadian insolvency filings.

Filing Type:

Trustee: BDO

Industry:

Province:

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

Filing Type:

Company Counsel: Miller Thomson

Trustee: A&M

Trustee Counsel: Aird & Berlis

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Inscape Corporation (TSX:INQ), Inscape (New York) Inc. and Inscape Inc. (collectively, the "Inscape Group"), manufacturers and distributors of office furniture to customers predominantly located in the United States and Canada, were granted CCAA protection on January 12. The Inscape Group maintains its head office in Holland Landing, East Gwillimbury, Ontario and operates from locations in East Gwillimbury, Ontario, as well as various locations in the United States. Over 90% of the Inscape Group's sales are to customers located in the United States. The Inscape Group has faced a number of challenges as a result of the continued impact of the Covid-19 pandemic, including a dramatic decline in order volumes and average order size attributed to a slower than expected return-to-office and many offices instituting work from home policies or transitioning to an entirely virtual office environment. The Inscape Group has also suffered from a number of supply chain and tightening liquidity issues, resulting in a shortage of production materials, which in turn has perpetuated delays to the completion of existing customer projects and orders. The principal purpose of the CCAA proceedings is to allow the Inscape Group to conduct a wind-down and liquidation of its assets and business in an orderly fashion. A&M was appointed monitor. Aird & Berlis is counsel to the monitor, Miller Thomson is counsel to the Inscape Group, Hicks Morley is employment counsel to the Inscape Group and Gowling WLG is counsel to the directors and officers of the Inscape Group.

By Dina Milivojevic

Filing Type:

Trustee: BDO

Applicant: CPL Investments LLC and Uloo Partners LLC (collectively, the "Sellers")

Applicant Counsel: Farris

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Bloom Health Partners Inc. (CSE:BLMH), a healthcare company with a registered address in Vancouver, British Columbia, was placed in receivership on January 3, on application by CPL Investments LLC and Uloo Partners LLC (collectively, the "Sellers"). The company wholly owns Bloom Health Holdings Corp. (the "Buyer"), a Delaware corporation. In June 2021, the Buyer purchased the Sellers' interest in Round Hill Health Partners, LLC for consideration of US$12,250,000. The Buyer has repeatedly failed to make payments owed to Sellers. After granting the Buyer two waivers, the Sellers demanded payment in late October 2022. In November 2022, the company informed the Sellers that the company's board and its interim CEO had resigned, and that it intended to wind down its business. As a result, the Sellers sought the appointment of a receiver to act as the company's management and continue operations until July 31, 2023, so that the company can fulfil its contract to supply COVID-19 testing services to the Texas Department of State Health Services, coordinated with an orderly wind down and sale of redundant assets. BDO was appointed Receiver. Farris is counsel for the Sellers.

By Dina Milivojevic

Laboratoires Bodycad inc.

December 22, 2022

Filing Type:

Company Counsel: Fasken

Trustee: Raymond Chabot

Industry:

Province:

Laboratoires Bodycad inc., a Québec City, Québec-based orthopaedic company specialized in the design and manufacturing of revolutionary and personalized products based on the anatomical specifications of a patient using the company’s proprietary Personalized Restoration™ software, obtained CCAA protection on December 22. Raymond Chabot was appointed monitor. Norton Rose Fulbright is counsel for Santé BB inc. (the DIP lender), Fasken is counsel for the company and Stein Monast is counsel for IQ.

By Dina Milivojevic

Filing Type:

Trustee: Grant Thornton

Applicant: National Bank of Canada

Applicant Counsel: TGF

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Ratnas Gas Inc. and Ratnas Property Investment Inc. (collectively, “Ratnas”), the operator of a Shell gas station in Port Hope, Ontario was placed in receivership on December 21, 2022, on application by National Bank of Canada, owed approximately $2.1 million. Grant Thornton was appointed receiver. TGF is counsel for the applicant.

By Dina Milivojevic

Filing Type:

Trustee: KSV

Trustee Counsel: Bennett Jones

Applicant: Cole Diamond Family Trust 2018 and Kinetic Café Inc.

Applicant Counsel: Goodmans

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9379-8676 Québec Inc. o/a Wilsons Leasing, which operates as a buyer and seller of luxury and exotic vehicles, was placed in receivership on December 21, on application by Cole Diamond Family Trust 2018 and Kinetic Café Inc., collectively owed $4 million in loans. The loans were due on October 15, 2022. One day before the due date, the company claimed to have made a wire transfer of $1.7 million to the lenders on account of the loans, but the funds never arrived and the originating bank had no record of the wire transfer. The company has not made any repayment on account of the loans. KSV was appointed receiver. Goodmans is counsel for the applicants and Bennett Jones is counsel for the receiver.

By Dina Milivojevic

Brant Instore Corporation

December 20, 2022

Filing Type:

Company Counsel: McMillan

Trustee: KSV

Trustee Counsel: Aird & Berlis

Applicant: BMO

Applicant Counsel: Davies

Industry:

Province:

Brant Instore Corporation, a Brampton, Ontario-based company providing a wide range of print solutions to North American retailers, was placed in receivership on December 20, on application by BMO, owed approximately $13 million. 139 people are employed with the company, including 97 unionized workers. Due to challenges faced by brick-and-mortar retailers in recent years, including the rise of e-commerce, and more recently the COVID-19 pandemic, the company has suffered declining sales and the loss of key customers, resulting in continued financial losses, which, since 2019, total approximately $16 million. KSV was appointed receiver. On the same day, a pre-pack sale of the company's assets, including all or substantially all of the company's employees, to 1000369798 Ontario Inc. was approved. Aird & Berlis is counsel to the receiver, Davies is counsel to BMO, McMillan is counsel to the company and Osler is counsel to the purchaser.

By Dina Milivojevic

DCL Corporation

December 20, 2022

Filing Type:

Company Counsel: Blakes

Trustee: A&M

Trustee Counsel: Osler

Industry:

Province:

DCL Corporation, a member of a larger group (the "DCL Group") which operates six manufacturing facilities throughout Canada, the US, the Netherlands and the UK, supplying pigments and dispersions to customers in the coatings, plastics and digital printing markets, obtained CCAA protection on December 20. On the same day, the company's parent and certain US subsidiaries obtained protection under Chapter 11 of the US Bankruptcy Code. As a result of heavy inflation in the global economy and the consistent pressures of increasing input costs, the DCL Group’s business is facing serious financial challenges. The company has also faced supply chain issues due to substantial delays and restrictions in receiving raw materials, higher costs and a higher working capital requirement. In addition, the company faced challenges with retaining and recruiting employees. These factors have eroded the company's gross margins and caused two of its three Canadian manufacturing plants to become unprofitable. The company has a number of past due payables with its trade creditors, is currently in default of various obligations under its credit facility and has a significant pension earn out owing to its previous owner. Consequently, the company is facing a liquidity crisis and urgently requires access to additional capital to meet its working capital needs, including to pay employees, vendors, utilities and the professional advisors required to address these issues. A&M was appointed monitor. Blakes is counsel for the company, Osler is counsel for the monitor, Goodmans is counsel for the Wells Fargo Bank, N.A. (the DIP lender), and Cassels is counsel for the term loan lenders.

By Dina Milivojevic

Geyser Brands Inc.

December 16, 2022

Filing Type:

Trustee: BDO

Applicant: 113 Royal Investments Ltd. ("113")

Applicant Counsel: Owen Bird

Industry:

Province:

Geyser Brands Inc., the ultimate parent company of 0957102 BC Ltd. (d.b.a. Apothecary Botanicals) ("095"), which holds a license from Health Canada for the cultivation, processing and sale of medical cannabis, was placed in receivership on December 16, on application by 113 Royal Investments Ltd. ("113"), owed over $1.8 million, plus interest, on a secured basis. Since 2020, 113 has been providing financing to Geyser, which Geyser has used to maintain 095's business. 095 requires cash injections of approximately $70,000 per month in order to remain operating. 113 is not willing to provide financing to Geyser or 095 indefinitely, and wishes to realize on its security. BDO was appointed Receiver. Owen Bird is counsel for 113.

By Dina Milivojevic

Filing Type:

Company Counsel: Mand Rai

Trustee: Albert Gelman

Applicant: 2046245 Ontario Inc., 2222228 Ontario Inc., 2473560 Ontario Inc. and 2473441 Ontario Inc. (collectively, the "Lenders")

Applicant Counsel: Keyser Mason Ball

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2244039 Ontario Inc. and 1526400 Ontario Inc., each of which owns and operates a gas station together with ancillary services and a quick service restaurant in Brampton and Caledon, Ontario respectively, were placed in receivership on December 14, on application by 2046245 Ontario Inc., 2222228 Ontario Inc., 2473560 Ontario Inc. and 2473441 Ontario Inc. (collectively, the "Lenders"). The Lenders provided financing in the cumulative amount of $14,550,000 to the companies. The companies have defaulted on their payment obligations under the loans, and owe approximately $15.3 million to the Lenders as at October 21. Albert Gelman was appointed receiver. Keyser Mason Ball is counsel for the Lenders and Mand Rai is counsel for the companies

By Dina Milivojevic