January 23, 2019

Filing Type:

Company Counsel: Loopstra Nixon

Trustee: Farber

Trustee Counsel: McMillan



Donaldson & James and The Agency Employment Services, two Kitchener, Ontario-based related companies that are part of a united business enterprise providing staffing services and solutions to customers, as well as support services to other staffing businesses, filed NOIs on January 23, listing $105.0M in liabilities. Around fall of 2018, management discovered that the companies' former CFO had not been making HST remittances and was reporting artificially high cash flows and profits. After discovering this, the companies' ability to finance their new growth was restricted and their senior secured operating lender, TD, signalled it wanted to exist the parties' relationship. FundThrough took an assignment of TD's debt in January 2019 and immediately terminated the credit agreement and demanded repayment. The NOI filing occurred shortly thereafter, with FundThrough agreeing to provide the company with DIP financing during these proceedings. FundThrough also indicated a desire to acquire the companies by utilizing its debt to "credit bid" and, accordingly, FundThrough and the companies have entered into a stalking horse asset purchase agreement. Farber is the proposal trustee. Counsel is Chaitons for FundThrough, Loopstra Nixon for the companies, McMillan for the proposal trustee and Aird & Berlis for TD.