July 19, 2019

Filing Type:

Company Counsel: Bennett Jones

Trustee: PwC

Trustee Counsel: Miller Thomson

Applicant: ATB Financial

Applicant Counsel: McCarthy Tétrault

Industry:

Province:

Schendel Mechanical Contracting, an Edmonton, Alberta-based mechanical contractor, was placed in receivership on July 19 on application by ATB Financial, owed approximately $18.1MM. One of Alberta's largest construction companies, the company had been successful for decades but hit a rough patch in late 2018 when work on one of its major projects, the Grande Prairie Regional Hospital, was halted by the Province of Alberta. The work stoppage affected Schendel's profitability, eventually causing it to default on amounts owing to ATB. In March 2019, ATB issued demand letters and notices of intention to enforce security. In response, the company filed an NOI and has been working hard to find a lifeline that would allow it to continue in business. On July 10, it filed a proposal to ATB and its other creditors. ATB immediately moved for an order deeming the proposal to be refused and an order appointing a receiver. ATB's position was that it had a veto over the proposal by the solo nature of its secured claim and it intended to vote against the proposal, based on a host of factors, including its perception that it would fare better in a bankruptcy or receivership than under the proposal. The orders were granted and PwC was appointed receiver. Counsel is McCarthy Tétrault for the applicant, Bennett Jones for the company, Miller Thomson for the receiver and MLT Aikins for the proposal trustee, Grant Thornton.

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