Net Zero Renewable Energy Inc. (TSXV:NZRE), a Niagara Falls, Ontario-based producer of structural building systems, including its proprietary “ENERTEC” product line, was placed in receivership on February 24 on application by Horizon RE Limited ("Horizon"). Horizon holds all $3,000,000 of the company’s outstanding issued Series 1 Debentures and $500,000 of the company’s outstanding issued Series 2-1 Debentures. The Series 1 Debentures matured on March 4, 2018, and the Series 2-1 Debentures matured on July 3, 2017. Horizon has never received any payment on account of either the Series 1 Debentures or the Series 2-1 Debentures. Farber was appointed receiver. Counsel is Dentons for Horizon, Miller Thomson for Computershare Trust Company of Canada (the Indenture Trustee) and Aird & Berlis for certain other debenture holders. By Dina Milivojevic
Mississauga Metals & Alloy, a Brantford, Ontario-based recycler/seller of metals, was deemed to have made an assignment in bankruptcy on August 20, listing approximately $31.1 million in liabilities, including $15.9 million to BNS and $812 thousand to EDC. The company attributes its financial difficulties to several factors, including (i) a catastrophic fire at the company's premises which caused significant damage to its manufacturing facility; (ii) difficulties in collecting receivables due to customer disputes regarding product quality; (iii) significant costs associated with the management and disposal of certain waste nuclear materials stored by the company; and (iv) the negative impact of the COVID-19 pandemic on the company's business operations. As a result of these issues, the company has been dependent on capital injections from the company's shareholders to fund operations. In July, the company filed an NOI so that it could pursue restructuring plans; however, the company ultimately failed to present a proposal to its creditors and was deemed to have made an assignment in bankruptcy on August 20. Richter is the bankruptcy trustee.
Mississauga Metals & Alloys Inc., a Brantford, Ontario-based metal recycling company, filed an NOI on July 20, listing approximately $27.7 million in liabilities, including $15.9 million to Scotiabank. In 2019, the Canadian Nuclear Safety Commission ("CNSC") issued an order to the company requiring it to cease managing radioactive waste at its facility until the CNSC had accepted an updated radiation protection program. Richter is the proposal trustee.
Forthryte Services Inc., a Fort McMurray, Alberta-based waste disposal and garbage removal company, was placed in receivership on May 14 on application by Canadian Western Bank ("CWB"), owed approximately $540 thousand. Pursuant to a loan agreement and various amendments to the agreement, CWB extended various loan segments to the company and Carmelo Daprocida, one of the company's directors. To secure their obligations to CWB, the company and Daprocida entered into separate general security agreements with CWB. CWB now alleges that the company and Daprocida are in default of the loan agreement for, among other reasons, failing to make required principal and interest payments. On May 5, CWB's legal counsel issued a demand letter to the company and Daprocida for payment of all amounts outstanding to CWB. The parties consented and waived the 10-day notice period under the BIA, thereby allowing CWB to immediately enforce its security. Farber was appointed receiver. Counsel is MLT Aikins for the receiver and Navigator Law for the company and Daprocida
Alter NRG Corp., a Calgary, Alberta-based company that provides renewable energy services and which operated as a publicly traded company listed on the TSX from 2008 to 2015, was placed in receivership on April 29 on application by Aleksandr Gorodetsky, Bruce Leonard, and Kenneth Willis (the "Applicants"). In May 2019, the Applicants obtained judgment against the company for approximately $1.1 million (the "Judgment"). Although the Applicants have made several demands for payment pursuant to the Judgment, the company has not made any payments to date. The only means the Applicants have to realize upon the Judgment is to monetize the company's unique technology, which will require the assistance of a receiver and manager. MNP was appointed receiver. McLennan Ross is counsel to the Applicants.
Rebuts Solides Canadiens, a Montreal, Quebec-based waste disposal company, along with certain other related companies, obtained protection under the CCAA on February 3, attributing its liquidity issues primarily to the decline in the recyclable materials industry. In particular, as a result of China's new recycling ban, the value of recycled materials has dropped dramatically in recent years. The price per ton of mixed paper fell from $121 in mid-2017 to $34 in November 2019. The Quebec government has authorized a $7.0 million loan to the company. The Ministry of Sustainable Development, Environment, and Fight Against Climate Change will provide $5.0 million, while RECYC-QUÉBEC will provide the remainder of the loan. PwC was appointed monitor. Fasken is counsel to the company.
Fortress Global Enterprises (TSX: FGE), a Montreal, Quebec-based company engaged in the dissolving pulp business and the renewable energy generation sector, obtained protection under the CCAA on December 16. Previously known as Fortress Paper, the company changed its name in 2018 to reflect its intention to shift away from traditional pulp and paper operations and pursue opportunities in new business segments. The majority of the company's revenues is now derived from the production and sale of dissolving pulp, a product with a variety of commercial applications, including the production of rayon textile fibres. The market for dissolving pulp, however, has not been favourable for the company, with prices dropping from almost $950 USD per ton in 2017 to $640 USD per ton this year. Other factors have also contributed to the company's financial difficulties, including the recent Sino-American economic conflict which is disrupting markets and the garment sector which Fortress serves. In the past three years, the company has lost approximately $246.6 million. In consultation with its senior secured lenders, the company launched a sale and investment solicitation process in August 2019 with the assistance of Houlihan Lokey but to date has failed to receive any indications of interest. With no liquidity to operate in the normal course, the company's senior secured lenders, Investissement Québec (IQ) and Fiera, made an application on the company's behalf for creditor protection. While under creditor protection, it is anticipated that the company's pulp mill will be indefinitely idled while the company waits for market conditions to improve. Concurrently, the company will explore other ways to return to profitability, including potentially modernizing and upgrading its current facilities with the assistance of a new investor. Deloitte is the monitor. Counsel is BCF for the company, McCarthy Tétrault for the monitor, Stikeman Elliott for IQ, Miller Thomson for Fiera, Blakes for International Forest Products and Goodmans for Computershare.
National Recycling, a Mississauga, Ontario-based scrap metal processor and related Alberta-based company were placed in receivership on July 12 on application by RBC, owed approximately $4.7MM. in June, 2019, RBC learned that SHiFT, a foreign exchange company, had commenced an action against National Recycling to recover a loss of approximately USD $2.9MM that it suffered as a result of two foreign exchange transactions that it facilitated for the company. Due to the mechanics of how foreign exchange transactions work, SHiFT is necessarily exposed to a risk of non-performance by its clients because the cheques that it deposits are typically cleared and processed the next day, whereas the pre-authorized debits made to its clients' accounts are not cleared and processed for three business days. In the two transactions at issue, after SHiFT had already transferred the Canadian funds to the company, it learned that the pre-authorized debits to the company's US dollar account at CIBC had been rejected due to non-sufficient funds. The company initially promised SHiFT that it was looking into the situation but it has since gone radio silent, and it appears that the business is no longer operating. With the companies already in default on their loans, RBC made the decision to have a receiver appointed to investigate and assess options on a go-forward basis for the benefit of all stakeholders. Deloitte was appointed receiver. Counsel is BLG for the applicant, Loopstra Nixon for the company, Dentons for the receiver and Adair Goldblatt Bieber for SHiFT.
Harvest Fraser Richmond Organics, an indirect subsidiary of Harvest Power, a Massachusetts-based company that specializes in converting food and yard waste into biofuel, compost and fertilizer, filed for protection under the CCAA on October 12, listing approximately $23.6MM in liabilities, including $16.3MM to Harvest Canada and $5.1MM to Harvest Power. The company owns and operates a manufacturing facility in Richmond, British Columbia for processing organic waste ("Compost Facility"), as well as an electricity-producing anaerobic digestion facility ("Energy Garden"). Pursuant to agreements with various cities in the lower mainland, the company accepted organic and food waste materials from these cities for processing at its facility. In September 2016, Metro Vancouver issued an air quality management permit to the company containing requirements such as reducing the height of compost piles and replacing its composting system. Despite operating under this permit, the Compost Facility has been affected by odour complaints from neighbouring residents since 2016 and has been the subject of reporting by Vancouver media outlets. In response to these complaints, the Energy Garden eventually ceased operation in April 2017. This shut down resulted in the company being unable to meet its energy delivery obligations to the British Columbia Hydro and Power Authority ("BC Hydro") under its agreement to sell BC Hydro certain quantities of renewable energy generated by the Energy Garden. BC Hydro advised that it would bill the company $12.5M in respect of the energy delivery shortfalls to date. The company cites further reasons for its financial difficulties, including, among other things, the fact that the company had to shut down one of its composting systems under the permit, which reduced the company's revenue. In addition, as of February 2018, Metro Vancouver has diverted certain of its waste to alternate service providers for processing. During these CCAA proceedings, Maynbridge Capital will be providing up to $1.0MM in DIP financing. EY was appointed monitor. Bennett Jones is counsel to the company.
BioAmber Sarnia and BioAmber Canada, the subsidiaries of BioAmber (TSX:BIOA), a Montreal, Quebec-based sustainable chemicals company, filed for protection under the CCAA on May 24, having previously filed NOIs on May 4. The company has listed $63.2MM in liabilities, including $10.0MM to BDC Capital and $10.0MM to Comerica Bank, Export Development Canada and Farm Credit Canada, collectively. PwC was appointed monitor. Counsel is Blakes for the companies, BLG for the monitor, TGF and Lavery for BDC Capital and McMillan for Comerica Bank.