October 5, 2022
Edward Collins Contracting Ltd. and various related entities (collectively, "ECC"), a group of companies operating in the heavy civil construction industry across Newfoundland and Labrador, obtained CCAA protection on October 5. ECC is a family-owned business that was created in 1974, having passed from the original owner, to son, to grandson. The primary causes of ECC's insolvency included, among other things: (1) ECC acquired a used asphalt plant from Texas that it had transported to Newfoundland and Labrador that it was ultimately not able to get running, resulting in losses of approximately $2 million; (2) ECC entered into an unfavourable bridge contract in 2019 which was supposed to be done over a 4-month period but rolled into 2020 and 2021, resulting in losses of over $1 million; (3) ECC accrued significant sourced deduction and HST arrears owed to CRA through 2019 to 2021; and (4) ECC's forbearance with RBC has expired and RBC has issued a demand on its $950,000 line of credit. Grant Thornton was appointed monitor. Counsel is O'Keefe & Company for ECC.
By Dina Milivojevic