Pulse RX Inc. and Family Pharmacy Clinic Inc., Woodbridge, Ontario-based companies which carry on business as a pharmacy focusing on servicing long term care and retirement residences, were placed in receivership on June 10 on application by 1951584 Ontario Inc. (dba Maxium Financial Services), owed approximately $1.4 million pursuant to a fixed rate promissory note between the companies and the applicant's predecessor in title, Desante Financial Services Inc. The companies have not made any payments to the applicant since June 2020. MNP was appointed receiver. Counsel is Wilson Vukelich for the applicant and Weisz Fell Kour for the receiver.
O2 Industries Inc., a Kitchener, Ontario-based company that designs and sells personal respirators for consumer, healthcare, and military/law enforcement markets, was placed in receivership on May 27. The company has experienced severe financial challenges as a result of declining sales, revenues, and substantial unsold inventory. The onset of the COVID-19 pandemic had created substantial demand for personal protective equipment ("PPE"), including masks and respirators. However, the company experienced a drastic decline in sales volumes as consumer demand for PPE peaked and the market became saturated with excess supply. Despite the bridge financing provided by lenders, the company has been unable to to execute on its business plan to attract additional capital from new investors or generate liquidity from the sale of product inventory. As part of the receivership proceedings, the receiver will solicit proposals for a sale of the company's business and assets. RSM Canada was appointed receiver. Goodmans in counsel for the applicant.
Eaglesmed Group Inc. ("Eaglesmed") and Chris Musah Professional Corporation ("CMPC"), which operate a Calgary, Alberta-based health and wellness clinic, were placed in receivership on February 12 on application by BMO, owed approximately $1.1 million by Eaglesmed and $1.4 million by CMPC. Both Eaglesmed and CMPC are in default of their respective loan agreements and guarantees as they incurred excesses in borrowing on operating lines, failed to pay amounts owing to BMO, and failed to provide the required reporting. Deloitte was appointed receiver and manager. Counsel is Dentons for BMO, Cassels for the receiver, and Robertson for the companies.
Maple Medi Pharma Inc. et al. (collectively, the "Debtors"), each of which owns or operates a pharmacy or owns the real estate on which a pharmacy is located, were placed in receivership on November 25 on application by 1951584 Ontario Inc. and CWB Maxium Financial Inc. ("CWB"), owed approximately $25.9 million on 19 promissory notes issued between 2015 and 2019. John Gerges, who is either a director, officer, or sole/significant shareholder of 19 of the 21 Debtors, is also a guarantor of a majority of the Debtors' promissory notes with CWB. In January 2020, CWB learned that Gerges had been charged with possession of a Schedule I substance. News reports indicated that the York Regional Police had recovered more than $500.0 thousand in opioid pills and an illegal handgun during their investigation of an alleged opioid trafficking ring. Since the criminal charges were laid against Gerges, CWB also became aware that certain of the Debtors were operating without any liability insurance. CWB's efforts to work with the Debtors with a view to consensually resolving the defaults have ultimately been unsuccessful and CWB has lost confidence in the Debtors' management. msi Spergel (GRIP) was appointed receiver. Counsel is Miller Thomson for the applicants, Weisz Fell Kour for certain of the Debtors, DLA Piper for certain of the other Debtors, and GSNH for the receiver.
Mallinckrodt Canada ULC, the Canadian member of a broader group of companies that operates a global specialty pharmaceutical business (collectively, "Mallinckrodt"), was declared a foreign representative of itself, Mallinckrodt plc and Mallinckrodt Hospital Products Inc. under the CCAA on October 16. Mallinckrodt Canada ULC sells and distributes a single product in Canada — Methadose, which is the brand name used by Mallinckrodt for what is generically known as methadone. Enterprise-threatening litigation in respect of Mallinckrodt's production and sale of opioid medications has left the group no choice but to seek to restructure the claims against it to survive. In particular, Mallinckrodt Canada ULC is a named defendant in a class action proceeding in BC. EY was appointed information officer. Torys is counsel to Mallinckrodt Canada ULC.
Concession Medical Pharmacy Ltd. (“Concession”), 2110044 Ontario Inc., 2589266 Ontario Inc., Concession Integrative Health Inc., and 2115265 Ontario Inc., a Hamilton, Ontario-based pharmacy which specializes in dispensing conventional medications as well as manufacturing and dispensing certain medical compounds, was placed into receivership on October 9 on application by BMO, owed approximately $5.0 million. The companies also owe McKesson Canada, a pharmaceutical company, approximately $800,000. BMO, which identified covenant breaches and several areas of concern with respect to the companies' cash flow position, entered into a standstill agreement with the companies in which it agreed to forbear until October 30. Despite the forbearance provided, Concession commenced NOI proceedings on July 28. However, the proposal was voted down on September 22 and Concession was deemed bankrupt. BDO was appointed receiver. Counsel is Chaitons for the applicant and Miller Thomson for the receiver.
TLC Vision (Canada) Corp., a Toronto, Ontario-based company which operates a laser eye centre in London, Ontario, filed an NOI on August 7, listing approximately $7.3 million in liabilities, including $6.3 million to CRA. With the COVID-19 pandemic, the company has been unable to operate its business and cannot defray its fixed costs which continue to accrue. In addition, key medical personnel have withdrawn their services with the intention of opening competing businesses after services open again. Farber is the proposal trustee. Weisz Fell Kour is counsel to the company.
PrimeCARE Health Clinics, Alberta-based healthcare providers with medical clinics in Calgary, Grand Prairie, and Carstairs, were placed in receivership on January 14 on application by ATB Financial, owed approximately $7.4 million. ATB had advanced funds to the companies pursuant to various commitment letters. The companies committed several defaults under these letters, and since May 2019, ATB has been negotiating with them to enter a forbearance agreement. However, the parties were unable to agree to the agreement prior to the clinics ceasing operations, and subsequent events led ATB to conclude that it was not prepared to provide further funding to the companies to continue the operation of their clinics. ATB was advised by the companies that they had removed $2.0 million from the business to be invested in real estate ventures, including a quadplex in Calgary and a failed development in Nigeria. When ATB asked for the details of these transactions to be provided as part of the proposed forbearance agreement, the companies failed to do so. These transactions caused ATB serious concern and were one of the primary causes of the companies' liquidity issues. EY was appointed receiver. MLT Aikins is counsel to the applicant.
Sudbury Regional Hearing Services, a privately-owned corporation that owns and operates hearing clinics in northern Ontario, and which was amalgamated with Bruserfactory (collectively, the "Debtor"), was placed in receivership on January 7 on application by Sivantos, a supplier and lender owed approximately $3.0 million. The Debtor, which did not provide Sivantos with advanced notice of its amalgamation, is in default of its obligations to Sivantos under their loan agreement. BDO was appointed receiver. Weaver, Simmons is counsel to the applicant.
Rando Drugs, owner of four pharmacies in Southwestern Ontario, was placed in receivership on December 4 on application by ECN Financial, owed approximately $4.1 million. Operating under a forbearance agreement since July 2019, the company had until the end of the year to refinance its debts or sell the pharmacies and pay out ECN. but it has not been able to do either. In late November, ECN learned that the landlord had purported to terminate the lease for one of the company's Windsor locations, effective December 31, 2019. The company did not disclose this to ECN for over two months. Having lost faith in the company, which had breached several covenants of the forbearance agreement, ECN moved for a receiver to be appointed to run an open and transparent sales process for the pharmacies. KSV was appointed receiver. Counsel is Miller Thomson for the applicant, Jerome Stanleigh for the company and GSNH for the receiver.