April 27, 2018
Direction Nord-Sud, a Montreal, Quebec-based logistics company, was placed in interim receivership on April 27 on application by Third Eye Capital (TEC), owed approximately $6.4MM. Since 2015, numerous events of default occurred and continue to occur under the loan agreement. TEC held off enforcing its security while the company, with the assistance of Richter, ran its own informal sales process. No transaction transpired however, nor was the company able to refinance with a different lender when the loan matured in June 2017. In 2017 and through 2018, TEC discovered a number of alleged fraudulent and suspicious activities, including the overstatement of revenue and accounts receivable and the depositing of certain receipts into a related company's bank account. On April 16, without consulting TEC, the company filed an NOI, with BLT Lapointe & Associés acting as trustee. Concerned about the dishonesty, lack of transparency, and deviousness of the company's principals, and fearing a deterioration of its security, TEC applied for an interim receivership order. KPMG was appointed interim receiver and was authorized to commence an accelerated sales process for the company's assets. Counsel is Fishman Flanz Meland Paquin for the applicant.