April 10, 2018
HB Solar Canada, a Concord, Ontario-based supplier of photovoltaic/solar energy array mounting systems and related equipment, filed an NOI on April 10, listing $2.9MM in liabilities, including $800.0M to RBC. By 2016, the company had reached the number one position in the Ontario market for solar rooftop racking. However, a confluence of factors eventually led to its insolvency. First, the local market for solar rooftop systems contracted by approximately 80% when changes were made to the Feed-In Tariff Program, which was launched in 2009 to encourage and promote greater use of renewable energy sources. Second, the company faced increased competition, thus forcing it to reduce prices and earn lower margins. Finally, it experienced a rise in bad debt write-offs and an accompanying reduction in available net working capital. Although the company has increased its efforts to attract additional capital from lenders and investors, no one is willing to invest further if there is no formal restructuring. As a result of these issues, the company now faces a liquidity crisis and is unable to maintain its obligations to creditors. Dodick Landau is the proposal trustee. Pallett Valo is counsel to the company.