Terra Nova Construction, a Calgary, Alberta-based construction company, was placed in receivership on May 17 on application by RBC, owed approximately $5.5MM. In addition to its failure to comply with its financial reporting requirements and its failure to advise the bank of any unfavourable change in its financial position, RBC suspected that the company had opened up another bank account for its day-to-day banking with a different financial institution, in breach of its loan agreement. Grant Thornton was appointed receiver. Counsel is McMillan for the applicant and Parlee McLaws for the company.
Heavy North Construction, an Edmonton, Alberta-based civil construction company, was placed in receivership on April 16 on application by 1056420 Alberta Ltd., owed approximately $2.4MM. KPMG was appointed receiver. Counsel is Bennett Jones for the applicant, Blakes for ATB and Osler for the receiver.
Devlin Construction, an Alberta, Edmonton-based construction company, was placed in receivership on April 9 on application by ATB, owed approximately $5.6MM. The company ran into financial difficulties with the downturn of the oil and gas industry as the number of jobs and margins on those jobs decreased. In February, the company filed an NOI in an attempt to restructure its affairs, seeking primarily to sell redundant assets and obtain interim financing. The company's request for a second extension of time to file a proposal was not supported by ATB or the Bowra Group, its proposal trustee, who reported that efforts to formulate a proposal were not progressing in an efficient and timely manner primarily because of the company's directors lack of cooperation and inability to work together. The court did not grant the extension and subsequently appointed PwC as receiver of the company. Counsel is Blakes for ATB and Emery Jamieson for the company.
Unison Construction Management, a Vancouver, British Columbia-based construction company, filed for bankruptcy on April 5. listing $9.2MM in liabilities, including $739.1M to BMO. The company's portfolio of commercial design-build projects include MNP's Vancouver offices at 1021 West Hastings Street. Grant Thornton is the bankruptcy trustee.
Bondfield, a Toronto, Ontario-based construction company with over $1B in current outstanding construction projects for major public-sector institutions across Ontario, obtained protection under the CCAA on April 3. Operating successfully for over 45 years, the company has run into significant financial and operational challenges in the past two years as it has taken on bigger P3 projects. Since August, 2018, the company's surety, Zurich Insurance, has funded the entirety of Bondfield's operations, including overhead, that could not otherwise be funded by ordinary course cash flow. Bondfield applied for creditor protection in early March, but Bridging Finance ("Bridging"), the company's senior lender, requested that the court adjourn the application to allow for a consensual restructuring approach to be agreed upon between Bridging, Bondfield and Zurich. Following extensive negotiations, a CCAA filing agreement was entered into. Under the agreement, Zurich will provide a DIP facility to fund overhead and Bridging will provide a DIP facility to fund certain litigation. EY was appointed monitor. Counsel is Osler for the company, Norton Rose Fulbright for the monitor, Goodmans for Bridging and BLG for Zurich.
Genco Holdings, a Calgary, Alberta-based developer of commercial and retail property that owns two properties collectively known as the "160 Acre Lands", a property known as the "634 Lands", and 12 separate condominium plan descriptions, had certain of its property placed in receivership on March 22 on application by HSBC, owed approximately $8.6MM. In light of various breaches and defaults committed by the company, HSBC has significant concerns regarding its ability to continue operating as a going concern. The application as it relates to 160 Acres Lands is adjourned by consent until next week with a view to reaching a deal. EY was appointed receiver. Counsel is Torys for the applicant and Fasken for EY.
Distinct Infrastructure Group (TSX:DUG), a Toronto, Ontario-based infrastructure provider for Canadian utilities, municipal and provincial governments, was placed in receivership on March 11 on application by RBC, owed approximately $53.4MM. The company's major customers include Rogers, Bell, Manitoba Hydro and the Manitoba Water Services Board. RBC recently became aware that the company had significantly misstated its borrowing base calculations and accounts receivable in its reporting to RBC. This resulted in the company obtaining advances under an operating line of credit of at least $30.0MM more than was otherwise permitted under credit facilities available to the company. In December 2018, the company informed RBC that it and one of its subsidiaries, iVac West, wished to place certain of their equipment for sale with Richie Bros. Auctioneers. RBC agreed that the company would initially apply $2.0MM from the proceeds of the auction against the obligations owed to RBC. In January 2019, the company applied for an order directing Richie Bros. to distribute the sale proceeds to RBC. This application was stayed upon the granting of the receivership order. The appointment of a receiver was necessary as the company is currently experiencing a severely stressed liquidity position and does not have sufficient cash to support its ongoing operations. Deloitte was appointed receiver. Counsel is TGF for RBC, Stikeman Elliott for a special committee of the company and Aird & Berlis for the receiver.
2433552 Ontario, carrying on business as GreenTerra Homes, filed for bankruptcy on January 11, listing $5.0MM in liabilities. The company commenced operations in 2017 as a custom builder of steel frame modular homes, metal buildings, sheds and related prefab kits. The company operated from a 110,000 sq. ft. plant located in Trenton, Ontario, which is owned by a related corporation. Albert Gelman is the bankruptcy trustee.
244931 Ontario, a special purpose entity wholly owned by Bondfield Construction, was placed in receivership on December 21 on application by BMO, as administrative agent for a syndicate of lenders, owed approximately $230.6MM. The company has no significant assets other than certain contracts relating to the St. Michael's Hospital Redevelopment Project. Due to various defaults committed by Bondfield, the contractor, there have been delays in the construction of this project, which involves building a new 17-storey patient-care tower at the corner of Queen and Victoria Streets in Toronto, Ontario. In addition, there are a number of construction liens registered on the project site, and as a result of Bondfield's financial challenges, the project has effectively come to a halt. Notwithstanding these default events, the company has not taken any steps to declare Bondfield in default under their construction contract or to make demand under the performance bond. In November 2018, the hospital delivered a default notice. With the hospital's support, BMO has been attempting to work consensually with Zurich Insurance, the project's surety, to restart and complete the project. However, BMO has been advised by Zurich that it cannot make demand on the performance bond unless it first "steps in" to the project, a step which may create additional liability for the lenders. Alvarez & Marsal was appointed receiver to facilitate the prompt resumption of the construction work and completion of the project. Counsel is Chaitons for the applicant, Osler for Bondfield, GSNH for Zurich Insurance, McCarthy for the hospital, Blakes for the receiver and Cassels Brock for Infrastructure Ontario. EllisDon is prepared to serve as the replacement contractor to complete the project.
2423403 Ontario, a special purpose wholly owned by Bondfield Construction, was placed in receivership on December 21 on application by TD, as administrative agent for a syndicate of lenders, owed approximately $61.5MM. The company has no significant assets other than relevant contracts relating to the development, construction and completion of the Hawkesbury & District General Hospital Redevelopment Project. Due to various defaults committed by Bondfield, the contractor, there have been delays and cost overruns in the construction of this project, which involves expanding the emergency department, constructing a new family birthing centre, and renovating the existing hospital to accommodate a new psychiatry in-patient unit. Notwithstanding the various default events by Bondfield, the company has not taken any steps to declare Bondfield in default, to seek performance by Bondfield, or to make demand under the performance bond. In September 10, 2018, the hospital delivered a default notice that triggered a 120-day period, expiring January 9, 2019, after which the project could be terminated. TD has made demand on the performance bond; however, Zurich Insurance, the project's surety, asserted that since TD had not asserted "step in" rights, the demand on the performance bond is considered a "nullity." The lenders have the option of asserting "step-in" rights but disagree they are obligated to exercise these rights, which may expose the lenders to greater liability. This appears to be a gating issue with Zurich Insurance. The purpose of the receivership is narrow and targeted, specifically formulated to address the issues that have arisen in this case in a discrete manner. PwC was appointed receiver. Counsel is McCarthy for the applicant, BLG for the hospital, Osler for the company and Bondfield and GSNH for Zurich Insurance.