Knotel Canada, Inc. had its US Chapter 11 proceedings recognized under the CCAA on March 12. Founded in 2015 and based in New York City, the company's parent and subsidiaries (collectively, the "Knotel Group") are a market leader in the dedicated flexible workspace industry. In Canada, the company has entered into leases for office space in the Financial District in Toronto to provide workspace arrangements in a dedicated, non-shared environment. Despite significant growth in 2019, the Knotel Group experienced significant disruption over the past year as a result of the COVID-19 pandemic, which adversely affected the Knotel Group's cash flow and ability to raise new capital. Throughout 2020, the Knotel Group took various actions to improve sales, reduce costs, and raise new capital. However, the pandemic’s duration and severe impact on the Knotel Group's liquidity proved to be overwhelming. In January, the company's parent and more than 200 US subsidiaries filed voluntary petitions for relief under the US Bankruptcy Code to facilitate a going concern sale of the Knotel Group's core business. Recognition of the Chapter 11 cases will avoid multiple main proceedings in different jurisdictions and give the Knotel Group the opportunity to complete a comprehensive sale of its business. Alvarez & Marsal was appointed information officer. Counsel is Cassels for the Canadian filing entities and Blakes for the information officer.
TGF Acquisition Parent Ltd., Sun Rich Fresh Foods Inc. and Tiffany Gate Foods Inc., British Columbia companies which are part of a larger group known as the Fresh Food Group (the "Group"), filed for protection under the CCAA on February 17, listing in excess of US$150,000,000 in liabilities, including US$119,000,000 to Cortland Capital Market Services LLC, as administrative agent to various lenders. The Group, which includes several US entities that filed for Chapter 11 protection on February 15, is a leading provider of branded and private-label offerings of fresh-cut fruits and vegetables, ready-to-go meals and meal kits, behind-the-glass salads, and other products. In 2019, the Group faced significant liquidity and other economic pressures, forcing it to implement certain strategic measures, including entering into an exchange transaction to restructure its indebtedness with its then existing lenders. Despite the exchange transaction, the Group has continued to face significant financial challenges in the context of its business operations, most recently due to economic pressures caused by the COVID-19 global pandemic. More specifically, in 2020, the demand for the Group’s largest product segments, fruits and vegetable trays, significantly declined as consumer habits began to change, and as the various federal, provincial and state governments in both Canada and in the US began imposing various sanitary measures and restrictions to prevent or limit the spread of the COVID-19 virus. These issues, combined with production and supply chain issues, have significantly affected the Group's liquidity position throughout 2020. EY was appointed monitor. Counsel is Stikeman Elliott for the companies and TGF for the Monitor.
2660807 Ontario Inc., a Brampton, Ontario-based company that operated an Esso gas station and Pizza Pizza restaurant in Tecumseh, Ontario, had its assets and real property placed in receivership on February 12 on application by RBC, owed approximately $2.6 million under a Letter Agreement between the parties, as amended by further agreements (collectively, the "Letter Agreement"). As a result of various events of default by the company under the Letter Agreement, RBC has demanded repayment of the indebtedness. The company, which ceased operations on February 5th, has indicated that it wishes to "hand over the keys" to its business to RBC. BDO was appointed receiver. Counsel is Harrison Pensa for RBC, Flett Beccario for the receiver, and Yonge-Norton Law Chambers for the company.
Yatsen Group of Companies Inc. and various other entities (collectively, the "Applicants"), which are comprised of 38 indirect subsidiaries of Markham, Ontario-based Edjar International Inc. — the largest Japanese quick service restaurant chain in the US with 226 Sarku Japan restaurants across 34 states and Puerto Rico — filed for protection under the CCAA on January 25. The Applicants are currently facing a liquidity crisis, with approximately US$26.8 million of arrears outstanding pursuant to their lease agreements. The Applicants also owe an undisclosed amount to their secured creditor, Wells Fargo Bank. The impact of the COVID-19 pandemic on the Applicants' business has been significant, with extensive restaurant closures and greatly reduced revenues for the 2020 fiscal year. During these CCAA proceedings, the Applicants will be receiving between $500.0 thousand and $5.0 million in DIP financing, depending on whether the Applicants bring a subsequent motion to increase the amount of DIP financing from $500.0 thousand to $5.0 million. Alvarez & Marsal was appointed monitor. Counsel is Goodmans for the Applicants, Osler for the monitor, Chaitons for the DIP lender, and Blakes for Wells Fargo Bank.
Dundas Retirement Place Inc., Maple Retirement Homes Inc., and 1059244 Ontario Inc., which each own and operate a retirement residence in Hamilton, Ontario, were placed in receivership on December 23 on application by Buduchnist Credit Union Limited ("BCU"), owed approximately $10.1 million in total. Each of the companies defaulted on its obligations to BCU and the defaults continue. Although the companies appear to have sufficient funds to make payments to BCU, payments are not being made and BCU has no visibility into what the funds are being used for. MNP was appointed receiver. Counsel is Keyser Mason Ball for the applicant and Brown Law for the companies.
Metropolitan Ice Cream Inc., a North York, Ontario-based family-owned company that made ice cream and ices, was placed in receivership on November 17. The Company’s products were available at various local grocery stores including Metro, Loblaws, Pusateri's, Highland Farms, Whole Foods, and Kitchen Table. Dodick Landau was appointed receiver.
Dine Under the Stars, a North Vancouver, British Columbia-based event management company that organized unique pop-up dinner events hosted at outdoor venues, filed for bankruptcy on November 10, listing approximately $ 1.7 million in liabilities. The company was preparing for its spring event season in mid-March 2020 when the COVID-19 pandemic caused all but essential services to shut down across North America. Almost immediately after shutdown measures were announced in March, customers began demanding refunds. Although the company has approximately $325.0 thousand in cash, it does not have sufficient cash to refund all of its customers the entire amount of their tickets, given that a significant portion of the revenues had already been invested in venue deposits, catering deposits, and advertising which likely cannot be recouped. MNP is the bankruptcy trustee.
King Street Restaurant Group, a Toronto, Ontario-based hospitality group, obtained protection under the CCAA on November 6. Prior to the onset of the COVID-19 pandemic, the Group operated eight restaurants under the following brands: Jacobs & Co, Buca, Bar Buca, La Banane, CXBO and Jamie’s Italian. Management has advised that the Companies’ financial difficulties and insolvency are attributable to two factors: (1) the significant impact of the COVID-19 pandemic and government restrictions on the Group’s business, contributing to a 98% decrease in year over year sales for the period from April to September 2020; and (2) the Jamie’s Italian locations at Yorkdale Mall and Square One Shopping Centre had insufficient revenues to make the restaurants profitable given their high fixed operating and start-up costs. The primary purpose of the CCAA proceedings is threefold: (1) to allow the Companies to operate their takeout and delivery business in order to maintain the value of their brands and preserve their various liquor licenses; (2) to stabilize the business operations to enable the Group to develop a strategy for the reopening of locations when possible; and (3) to develop and oversee an orderly restructuring of the business, including through the development and implementation of a SISP. MNP was appointed monitor. Counsel is Miller Thomson for the monitor, Gowling WLG (Canada) for the companies and Bennett Jones for secured lender and DIP lender Third Eye Capital.
Hacienda Sarria, a Kitchener, Ontario-based wedding venue, made an assignment in bankruptcy on October 21, listing approximately $1.2 million in liabilities. The company cited the ongoing COVID-19 situation and continuously changing government restrictions as the reasons for the bankruptcy. There are 155 unsecured creditors listed on the notice of bankruptcy. They include businesses and schools that paid deposits for proms, but the vast majority of the company's creditors are couples who paid deposits for their weddings. BDO is the bankruptcy trustee.
Dubh Linn Gate Partners (Vancouver) Company, a Vancouver, British Columbia-based company that owns a popular pub, filed for bankruptcy on October 20, listing approximately $1.7 million in assets and $2.6 million in liabilities. EY is the bankruptcy trustee