December 20, 2022

Filing Type:

Company Counsel: Blakes

Trustee: A&M

Trustee Counsel: Osler



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