Our summaries of recent Canadian insolvency filings.

CB 11 South Woodbridge Corp.

September 18, 2022

Filing Type:

Company Counsel: Dickinson Wright, Tyr and Murray Maltz Professional Corporation

Trustee: EY

Applicant: Canada ICI Capital Corporation ("ICI")

Applicant Counsel: Blaney McMurtry

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CB 11 South Woodbridge Corp., the owner of 1.91 acres of development land in Woodbridge, Ontario, was placed in receivership on September 18, on application by Canada ICI Capital Corporation ("ICI"), owed approximately $7.6 million. The proposed development was a 4-storey multi-family residential condominium building with approximately 90 units and 108 parking spaces. When the ICI mortgage was entered into, a second mortgage in favour of Fred Hui was subordinated to the ICI mortgage. Contrary to the terms of the subordination agreement, Hui made demand for payment under the second mortgage, issued a notice of sale and entered into a listing agreement for the property. In addition, a number of construction liens and cautions have been registered against the property. EY was appointed receiver. Counsel is Blaney McMurtry for ICI and Dickinson Wright, Tyr and Murray Maltz Professional Corporation for the company.

By Dina Milivojevic

BR Capital Inc.

September 14, 2022

Filing Type:

Company Counsel: Gowlings WLG

Trustee: KPMG

Trustee Counsel: Osler

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BR Capital Inc. and twelve related entities each filed an NOI on September 14, 2022, listing approximately $2.7 million in liabilities. The companies, based in Calgary, Alberta, had developed various cloud-based software systems for dental/medical clinics and for teaching functions. Due to disruptions caused by the COVID-19 pandemic, demand for new licenses and revenue had declined, resulting in liquidity pressures and resulting in the decision to file the NOIs. KPMG is the proposal trustee, Gowlings WLG is counsel for the companies and Osler is counsel for the proposal trustee.

By Dina Milivojevic

Filing Type:

Trustee: KSV

Trustee Counsel: McMillan

Applicant: Cortland Credit Lending Corporation ("Cortland")

Applicant Counsel: Dentons

Industry:

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Genesis Integration Inc. ("Genesis"), an Edmonton, Alberta-based company in the business of designing and integrating audiovisual collaboration systems for both public sector and corporate clients, and its sole shareholder, 965591 Alberta Ltd. ("965"), a holding company, were each placed in receivership on September 14, on application by Cortland Credit Lending Corporation ("Cortland"), owed approximately $9.5 million, plus legal fees, interest and costs. The Cortland debt is guaranteed by Genesis and its wholly-owned subsidiary, Fusion Cine Sales & Rental Inc. ("Fusion”). On the same day that the Receivership Order was granted, a Reverse Vesting Order was granted approving a going concern sale to Sequent AI Exchangeco Limited, a related party, of all of the issued and outstanding shares of Genesis, including Genesis’s ownership interest in Fusion, without any effect on Fusion’s creditor obligations, including in respect of the Cortland debt and amounts it owes to certain critical suppliers. KSV was appointed receiver. Counsel is Dentons for Cortland, McMillan for the receiver and Blakes for the purchaser.

By Dina Milivojevic

Filing Type:

Trustee: Grant Thornton

Industry:

Province:

Medisun Inc. (“Medisun” or the “company”) is a licensed cannabis producer located in southwestern Ontario. With 13 acres of greenhouse grow area, Medisun has become one of Canada’s top licensed cannabis cultivators. On September 7, 2022, Medisun filed an NOI, listing approximately $48 million in liabilities of which $13.8 million is owed to the senior secured creditor and parent company, Cannim Group Ptl Ltd. The company is working on a restructuring plan during the NOI period. Counsel to the Company is Baker McKenzie. Grant Thornton is the proposal trustee and its counsel is WeirFoulds.

By Dina Milivojevic

Filing Type:

Trustee: A&M

Industry:

Province:

Great Panther Mining Limited (TSX:GPR), a precious metals producer focused on the operation of the Tucano Gold Mine in Brazil, filed an NOI on September 6, listing approximately $17.9 million in liabilities, including approximately $17.1 million to Asahi Refining Canada Limited. The following day, the company also filed a judicial reorganization proceeding in the Brazil. The filing was precipitated by, among other things, Inflationary pressures significantly impacting costs, operational challenges, the necessary acceleration of certain capital programs, and contractor mobilization delays because of equipment availability issues, all of which led the company to forecast that it would likely default on several material agreements. A&M is the proposal trustee.

By Dina Milivojevic

Corsameccanica Inc.

September 6, 2022

Filing Type:

Trustee: Krieger & Company

Industry:

Province:

Corsameccanica Inc., which operated a premium Italian motorcycle shop from premises located in Concord, Ontario, filed an assignment in bankruptcy on September 6. Corsameccanica was a dealer of Ducati and Piaggio (Aprilia/Moto Guzzi/Vespa) motorcycles and provided sales, service, and apparel. The company declared $476,655.85 in total liabilities at the time of its bankruptcy. Krieger & Company is the bankruptcy trustee.

By Dina Milivojevic

Filing Type:

Company Counsel: DLA Piper

Trustee: Grant Thornton

Trustee Counsel: Burnet, Duckworth & Palmer

Industry:

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Universal Mechanical Ltd. (“UniMech”), Movin’ Air Heating & Air Conditioning Ltd. (“Movin’ Air”), and Agincourt Limited (collectively, the “Companies”) each filed an NOI on September 6, 2022. UniMech and Movin’ Air respectively operated as mechanical and HVAC contractors in Calgary, Alberta. The Companies collectively listed $9.7 million in liabilities, including approximately $3.3 million to RBC. Due to project delivery delays, customer payments have been withheld or delayed, which resulted in liquidity pressures and the decision to file the NOI. Grant Thornton is the proposal trustee. DLA Piper is counsel for the Companies and Burnet, Duckworth & Palmer is counsel for the proposal trustee.

By Dina Milivojevic

City & Stay Hotel Group Ltd.

September 2, 2022

Filing Type:

Company Counsel: Miller Thomson

Trustee: Rosen Goldberg

Applicant: Andrew Peek and Constantine Trevor Speis

Applicant Counsel: Advocan Law

Industry:

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City & Stay Hotel Group Ltd., which operates a boutique hotel on Brunswick Avenue in Toronto, Ontario, was placed in receivership on September 2, on application by Andrew Peek and Constantine Trevor Speis, owed over $540,000. In 2018, the company entered into a credit facility with TD Bank, which was guaranteed by Peek and Speis. The company defaulted on the loan and, in August 2022, Peek and Speis paid TD Bank over $540,000 in satisfaction of the guarantees. They also received an assignment of TD Bank's security interest. The company is operating at a loss, and does not have the cash flow to maintain its business and pay its obligations. It has made various attempts to secure additional debt or equity funding to solve its ongoing liquidity problems, all of which were unsuccessful. Rosen Goldberg was appointed receiver. Counsel is Miller Thomson for the company and Advocan Law for Peek and Speis.

By Dina Milivojevic

2580363 Ontario Inc.

September 1, 2022

Filing Type:

Trustee: msi Spergel

Trustee Counsel: Fogler, Rubinoff

Applicant: TD Bank

Applicant Counsel: Harrison Pensa

Industry:

Province:

2580363 Ontario Inc., which operated as a restaurant known as “Aout ‘n About” from premises located in Hamilton, Ontario, and 2580361 Ontario Inc., which owned the premises, were placed in receivership on September 1, on application by TD Bank, owed approximately $1.4 million. The companies have defaulted on the terms of the credit facilities provided by TD Bank, including by failing to make payments when due; allowing arrears of property tax to become due to the City of Hamilton; and allowing charges to be registered on title to the premises, subsequent to the TD Bank mortgage, in favour of Olympia Trust Company, Comfort Capital Inc. and Alex Magis. msi Spergel was appointed receiver. Counsel is Fogler, Rubinoff for the receiver and Harrison Pensa for TD Bank.

By Dina Milivojevic

Filing Type:

Company Counsel: Cassels Brock

Trustee: PwC

Trustee Counsel: Bennett Jones

Industry:

Province:

Superette Inc., Superette Ontario Inc. et al. - a retailer of premium cannabis brands operating in Ontario - obtained CCAA protection on August 30. Superette has been adversely impacted by the distressed state of the retail cannabis market in Canada which resulted in significant liquidity issues. On its comeback hearing, Superette will be seeking approval of a SISP which will be backstopped by a stalking horse bid and DIP financing from its existing secured lender, SNDL Inc. (formerly, Sundial Growers Inc.). PricewaterhouseCoopers Inc. was appointed monitor. Counsel is Cassels Brock for the companies, Bennett Jones for the monitor, and McCarthy Tétrault for SNDL.

BUSINESS FOR SALE / INVESTORS SOUGHT

PricewaterhouseCoopers Inc. (“PwC”), in its capacity as the court-appointed monitor, is launching a Court-approved sale and investment solicitation process (“SISP”) for the purpose of soliciting proposals to purchase or invest in some or all of Superette’s assets, business and operations. Superette is an established brand-first retailer of premium cannabis products in Ontario focused on an immersive yet familiar nostalgic retail experience.

In order to obtain detailed information on Superette, interested parties will be required to sign a non-disclosure agreement. The deadline for non-binding expressions of interest in the SISP is October 11, 2022 at 5:00 p.m. ET.

For further information, please refer to www.pwc.com/ca/superette or contact [email protected]

By Dina Milivojevic