Hillspring Farms Ltd. ("Hillspring"), HSF Foods Ltd. ("HSF"), and Hillspring Warehouse & Logistics Inc., New Brunswick-based companies engaged in grain brokerage services, a potato farming operation and a flake plant operation, filed for bankruptcy on June 26 and was placed in receivership on June 29 on application by Farm Credit Canada ("FCC"), owed approximately $70.7 million. In addition to the financing with FCC, the companies obtained financing from CIBC, owed approximately $21.2 million, BDC, and other secured creditors. Although the combined HSF and Hillspring revenues between 2016 and 2019 remained relatively stable, averaging $30.6 million per year, the combined debt levels increased from $43.1 million in 2016 to $107.0 million in 2019. After various meetings, the companies determined that a sale of their assets was the only solution to address their financial difficulties and the court has approved a sale agreement between the companies and McCain Produce. EY is the bankruptcy trustee and was appointed receiver. Counsel is McInnes Cooper for the companies, Cox & Palmer for FCC and Davies for the McCain Produce.
Northern Pulp Nova Scotia Corporation, which owns a pulp mill in Abercrombie, Nova Scotia, along with its affiliates (collectively, the "Petitioners"), filed for protection under the CCAA on June 19 after the Petitioners were forced to cease business operations of their mill on January 31 and lay off over 300 employees. The mill closed following the Nova Scotia Premier's refusal to extend the life of the company's effluent treatment plant in Boat Harbour. As a consequence of the mill's closure and associated operational issues, the Petitioners face immediate and multiple challenges to their continued viability and project they will run out of cash in late July. Without CCAA protection, the Petitioners, which currently owe approximately $84.9 million to the Province of Nova Scotia, will be unable to transition the mill and their operations into a safe state of hibernation and preservation. EY was appointed monitor. Counsel is McCarthy Tétrault for the Petitioners and Stewart McKelvey for the Province of Nova Scotia.
Neucel Specialty Cellulose Ltd., which owns a pulp mill in Port Alice, British Columbia, was adjudged bankrupt and placed in receivership on April 22 on application by the Province of BC, owed approximately $13.1 million. The company had purchased the assets of the Port Alice mill for $1 with an investment plan of $40 million before September 2007. In 2011, Fulida (Canada) Holdings purchased Neucel and announced an upgrade project totalling $33.9 million, although this project was never commenced. In 2015, the company announced a six-month curtailment of the Port Alice mill. However, since then, the mill has not returned to production status and the last annual report the company filed was in 2018. In early 2019, the company instructed the remaining maintenance workers at the Port Alice mill to vacate the site. After the affected workers contacted the Ministry of Environment and Climate Change Strategy ("ENV"), it conducted an on-site chemical hazard assessment and notified the company that it would take certain spill response actions, which cost over $11.9 million to conduct. The actions included removing over 855,000 litres of 10% Spent Sulphite Liquor, a hazardous sulphite by-product of the pulping process, removing over 437,000 litres of ammonium bisulphate and facilitating the removal by the Canadian Nuclear Safety Commission of 8 radioactive nuclear sources from the mill site. Despite ENV's efforts, various concerns remain. The company's employees continue to cause environmental damage and the company additionally appears to have taken steps to dissipate its assets. PwC is the bankruptcy trustee and court-appointed receiver. Counsel is Fasken for PwC and Pacific Rim Law for Fulida
Grabhers Last Stand Bison Ranch, a Dawson Creek, British Columbia-based bison ranch, was placed in receivership on February 3 on application by the Bank of Nova Scotia, owed approximately $6.6 million. After the corporation defaulted under its loan agreements with BNS, BNS made demands for repayment of amounts owed under these agreements. To date, the corporation has failed to make any payments. BNS further alleges that the corporation withheld relevant information when applying for credit, and that the corporation engaged in uncooperative and potentially fraudulent conduct. For example, while the corporation's profit and loss statement for January - September 2019 indicates revenue generated of approximately $1.8 million, this amount was not deposited into the corporation's account with BNS. Furthermore, the corporation sold 430 heads of bison to a related corporation without informing BNS or receiving its consent for the transfer of assets. Deloitte was appointed receiver. MLT Aikins is counsel to the applicant.
GWD Christmas Tree Farms, a Saint John, New Brunswick-based company which operated a Christmas tree farm on five parcels of land in New Brunswick, was adjudged bankrupt on January 15, listing approximately $11.9 thousand in liabilities. However, the bankruptcy trustee, Grant Thornton, is aware of at least 50 additional claims with claim values totaling $2.2 million. The company's creditors have not received any payments or communications from the company, and it appears the company has no formal management or representation in place.
Les Serres Lefort, a Sainte-Clotilde, Quebec-based producer of greenhouse vegetables, filed an NOI on September 6, listing $44.7 million in liabilities, including $31.7 million to Desjardins and $6.9 million to Investissement Québec. With over 20 hectares of greenhouses, the company is one of the largest producers in the province. For the last several years, the company has been focusing its efforts on producing organic vegetables but has struggled with lower-than-expected yields. Raymond Chabot is the proposal trustee.
Performance AG Group, a Calmar, Alberta-based supplier of crop input products, was adjudged bankrupt on August 1 on application by Farm Credit Canada. Pursuant to an agreement with FCC, customers could purchase their supplies from the company and have the amount owing added to their crop input loan with FCC. The company would then receive payment directly from FCC. Recently, FCC has learned that in several instances, customers have indicated that amounts were added to their loan for purchases they did not make or agree to. It appears that other customers have also been subject to the same issue with Scotia Bank and BMO. The Bowra Group was appointed bankruptcy trustee. Miller Thomson is counsel for the applicant.
DT Grain, a grain pooling company operating out of Okotoks, Alberta, filed for bankruptcy on July 24, listing $1.1MM in liabilities. The company sold grain to feedlots under contracts that included the delivery of the grain. When bidding on contracts, the company assumed it could backhaul from the drop-off locations to offset transportation costs. In reality, however, the company was unable to schedule the backhauls that it anticipated, leading to higher than expected costs and strains on cash flow. The Bowra Group was appointed bankruptcy trustee.
ILTA Grain, a Surrey, British Columbia-based grain producer, filed for protection under the CCAA on July 7, listing $149.5MM in liabilities. Founded in 2011, the company has become one of the two largest processors of quality grains in Canada, operating from six state-of-the-art facilities in Saskatchewan. As part of its growth strategy, the company has made significant efforts to export its products internationally. Over the past few years, however, the company has faced increasingly challenging international trade conditions as countries such as India, China and Saudi Arabia have decided to limit, and in some cases, entirely discontinue their Canadian imports. The reduction in international sales, coupled with a highly leveraged balance sheet, has left the company without the working capital necessary to fund operations and service its debt. While under creditor protection the company will explore its strategic alternatives, including conducting a sale and investment solicitation process. PwC was appointed monitor. Stikeman Elliott is counsel for the company.
Mike Weir Wine, a private corporation that was incorporated to produce, market and sell wine, branded as "Mike Weir Wine", from a winery located in Beamsville, Ontario, was placed in receivership on January 30 on application by Michael Richard Weir, owed approximately $2.2MM. The corporation also owes RBC around $4.3MM. In October 2017, Mike Weir sold all of his shares in the company to a company controlled by radio sports broadcaster, Bob McCown, who is the current president and director of MWW. As part of the sale transaction, Weir took back promissory notes, certain of which were secured. The promissory notes were not repaid when they became due on October 20, 2018. Since that time, the applicant, through its counsel and independently, has made numerous attempts to communicate with MWW and counsel to MWW regarding the indebtedness, however, no response has been received. The corporation's principal asset is its property and certain equipment. In order to maximize value realization from the property, the implementation of a sale process is necessary so that any buyer is able to take advantage of the spring time growing season by being in possession of the property with sufficient time to tend the vines so the vineyard does not lie fallow for another year. BDO was appointed receiver. Counsel is Sullivan Mahoney for the corporation, Cassels Brock and Kray Law for the applicant, Brauti Thorning Zibarras for the receiver and Aird & Berlis for RBC.