Purdue Pharma LP, a Stamford, Connecticut-based pharmaceutical company, obtained a Canadian recognition order of its US Chapter 11 proceedings on September 19. The company's most prominent product is its opioid pain medication, OxyContin. The company has been named in more than 2,600 lawsuits filed throughout the US state and federal court systems. The lawsuits allege that the company acted improperly in the marketing and sale of OxyContin and is responsible for fueling an opioid addiction crisis in the United States. In Canada, Purdue is also subject to over 10 class-action lawsuits. The company has sought bankruptcy protection in an attempt to find a global resolution of the existing claims against it. The company is proposing a settlement that involves, among other things, a $3.0 billion contribution from the company's shareholders and the transfer of the company's business and assets into a trust for the benefit of claimants and the US public. EY was appointed information officer. Canadian counsel is Stikeman Elliott for Purdue, Torys for the information officer, BLG for certain affiliated Purdue Canadian entities and Paliare Roland for the Sackler families.
Crystal Clear Vision, a Toronto, Ontario-based laser eye surgery clinic, filed for bankruptcy on March 29, listing $1.3MM in liabilities, including $885.2M to its US-based parent company, NVision Laser Eye Centres. The company had seen a decline in sales over the past few years, and its parent company advised in early March that it was no longer willing to fund the losses. Fuller Landau is the bankruptcy trustee.
605673 British Columbia Ltd., doing business as A&J First Aid, a Chetwynd, British Columbia-based supplier of mobile first aid treatment centres and occupational first aid attendants for the construction industry, was deemed bankrupt on March 13 on application by TD, owed approximately $516.4M. The company had not been operational since late January 2019, and in February 2019, Expert Bailiffs, at the direction of CRA, seized 20 of the company's vehicles in respect of outstanding amounts owing to CRA. PwC is the bankruptcy trustee.
A&Q Sons Management, Canadian One Home Health Care, and Q & Sons Management (collectively, the "Debtors"), which own and operate Fairfield Manor West Retirement Home and Fairfield Manor East Retirement Home — two retirement homes located in Kingston, Ontario — were placed in receivership on February 22 on application by Centurion Mortgage Capital. The Debtors currently list approximately $4.0MM in secured liabilities. In the spring and summer of 2018, following inspections of the retirement homes, the Retirement Home Regulatory Authority issued orders against the Debtors to revoke their operating licences. Additionally, around September 2018, the Kingston fire department issued evacuation orders at both facilities due to ongoing health and safety concerns. The Debtors subsequently defaulted in their mortgage loan obligations. BDO was appointed receiver. Counsel is Robins Appleby for the receiver and Chaitons for the applicant.
Avara Boucherville Pharmaceutical Services, a Boucherville, Quebec-based international pharmaceutical services company that delivers world-class contract manufacturing and technical services to the pharmaceutical industry, was placed in receivership on February 18 on application by Sandoz Canada, another pharmaceutical company. EY was appointed receiver. Miller Thomson is counsel to the applicant.
Coredent Partnership, an Edmonton, Alberta-based privately-held company comprised of five licensed dental clinics, was placed in interim receivership on December 21 on application by ATB Financial, owed approximately $6.6MM. The company also owes $2.7MM to its other creditors. PwC was appointed interim receiver. Counsel is Blakes for the applicant and Miller Thomson for the receiver.
Atlas Healthcare (Richmond Hill), a group of entities working to develop a six-story medical office building in Richmond Hill, Ontario, was placed in receivership on December 3 on application by Romspen, owed approximately $81.0MM. The project is behind schedule and over budget by approximately $39.0MM. The debtors' attempt to obtain creditor protection under the CCAA was denied in favour of the receivership. EY was appointed receiver. Counsel is Dickinson Wright for Romspen and Blaney for the receiver.
Oxford Advanced Imaging, a Toronto, Ontario-based company that provides medical diagnostic services, including MRI and CT testing, and which owns and operates two medical diagnostic imaging clinics, had its assets and business placed under an order for sale on August 29 on application by TD, owed approximately $10.9MM. The company, which was formed by a group of four radiologists, originally acquired the business from Life Labs. Shortly after the acquisition, the company began to suffer from severe and irreconcilable disagreements among shareholding groups and board members. In particular, there was a strong discord between the company's president, Dr. Jae Kim, and the other three radiologists. The company had made a number of cash advances to related entities that did not share the same ownership as the company but in which Dr. Kim held significant equity interests. Although Dr. Kim asserted that there were good business reasons for those advances, the other doctors did not accept his claim. By the summer of 2017, the company owed approximately $1.4MM to these related corporations, which subsequently affected the company's liquidity. With the cooperation of TD, the company attempted to commence an informal winding-up of its business operations by offering them up for sale. Although the lengthy sales process eventually resulted in an Agreement of Purchase of Sale dated April 2018, a specific condition was not met; as a result, the Agreement could not be completed and was terminated by the seller. The company's business is threatened unless it is able to promptly re-market its business and complete a sale. There is public interest in keeping the clinics open and operating during the sales process as they provide 40% or more of the Ontario public's access to MRI services outside of hospital operations. KPMG was appointed sales officer. Counsel is Aird & Berlis for TD, Wilson Vukelich for the company, Foglers for three radiologists (Dr. Gordon Cheung, Dr. Davinder Gill, Dr. Deep Chatha) and Dentons for KPMG.
Aralez Pharmaceuticals (TSX:ARZ), a global pharmaceutical company based in Mississauga, Ontario, obtained protection under the CCAA on August 10. In connection with these proceedings, the company's subsidiaries in the US and Ireland also filed for Chapter 11 bankruptcy protection. Operating in a highly competitive industry dominated by a small number of global giants, Aralez focused on acquiring, developing and commercializing products primarily in cardiovascular disease and other specialty areas. The company incurred significant losses in recent years due, in large part, to significant costs incurred to launch sales of two new products in the US, both of which failed to reach anticipated levels of commercial success. In 2017, the company lost $125.2MM. The losses were funded partially by debt, which the company can no longer service. Following a strategic review undertaken by the company's board, the decision was made to run a sale process for the company's business and assets under court supervision. The company intends to enter into purchase agreements with two separate stalking-horse purchasers to sell its main operating businesses. One of the stalking-horse purchasers is its secured lender, Deerfield, who will also be providing DIP financing during the restructuring proceedings. Richter was appointed monitor. Alvarez & Marsal was appointed financial advisor. Canadian counsel is Stikeman Elliott for the company, Torys for the monitor, Bennett Jones for Deerfield and Goodmans for Nuvo Pharmaceuticals (the other proposed stalking horse purchaser).
IPAX Clinic, an Edmonton, Alberta-based pain management clinic, filed for bankruptcy on August 9, listing $1.0MM in liabilities, including $948.8M to Mohawk Medical Operating Partnership. EY was appointed bankruptcy trustee. McLeod Law is counsel to Mohawk Medical Operating Partnership.