Healthcare

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.

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.

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.