April 29, 2019

Filing Type:

Company Counsel: Bennett & Company

Trustee: BDO

Trustee Counsel: Zener & Waxman

Industry:

Province:

Toonbox Entertainment, a Toronto, Ontario-based animation studio, filed a proposal on April 29. Established in 2008, the company has produced award-winning movies and television shows such as The Nut Job and The Nut Job 2. The Nut Job 2, which was produced through a wholly-owned subsidiary of Toonbox, was eligible to claim certain provincial and federal refundable tax credits for the production of the film. These tax credits were used by the production company to secure funding from the Pacific Mercantile Bank, with Toonbox acting as a guarantor of the facility. When the production company failed to remit to Pacific Mercantile the approximately $7.5MM it received on account of the tax credits, the lender brought an application for the appointment of an interim receiver. BDO was appointed interim receiver on April 18. The company subsequently filed a proposal on April 29, with BDO acting as proposal trustee. Under the terms of the proposal, the assets of the company will vest in the trustee, who will conduct a sale process for the assets. Counsel is Bennett & Company for Toonbox, Cassels Brock for Pacific Mercantile and Zener & Waxman for the proposal trustee.