May 21, 2020
First Hamilton Holdings Inc., a Toronto, Ontario-based investment corporation specializing in high yield bonds, along with its subsidiaries, was placed in liquidation on May 21, listing approximately $34.0 million in liabilities. The company, whose business is closely related to PACE Securities Corp. ("PSC"), attributes its financial difficulties to various factors, including the COVID-19 pandemic, which resulted in the company having to respond to margin calls by Laurentian Bank Securities ("LBS"), PSC's carrying broker and the custodian of the securities of the company's clients. While the company was able to reach certain arrangements with LBS in April, the company was required to liquidate significant portions of its portfolio of corporate bonds to meet LBS' new margin requirements. This reduction in the assets of the company's portfolio meant lower interest income from the corporate bonds which it held. The company was also forced to sell its corporate bonds at prices substantially less than their acquisition costs. MNP was appointed liquidator. Dickinson Wright is counsel to the companies.