Spectra Premium Industries, a Boucherville, Quebec-based company that specializes in the design, manufacturing, and distribution of cooling systems and other automotive products, together with several of its subsidiaries (collectively, the "Spectra Group"), obtained protection under the CCAA on March 10, listing approximately $249.0 million in liabilities, including $102.9 million to Wells Fargo and $20.7 million to Laurentian Bank. Over the past few years, the Spectra Group has seen a progressive reduction of its profitability. For the year ended January 31, 2020, the Spectra Group suffered a loss of more than $13.0 million. The group attributes its financial difficulties primarily to a shift in customer demand towards aftermarket products that are cheaper; an oversupply of certain products in the US market and increased costs as a result of the tariffs imposed on goods imported from China. EY was appointed monitor. Counsel is Norton Rose Fulbright for the monitor, Lavery, de Billy for the Spectra Group, Bennett Jones and Fishman Flanz Meland Paquin for Wells Fargo, and McCarthy Tétrault for Laurentian Bank.
Nygard Properties, Nygard Enterprises, Nygard International Partnership, 4093887 Canada, and 4093879 Canada (collectively, the “Nygard Group”), a Winnipeg, Manitoba-based clothing brand, each filed an NOI on March 9. Last month, the company's founder and chairman, Peter Nygard, agreed to step down from his company and divest his ownership interest after an FBI raid of the company's New York headquarters and news that a class action lawsuit had been launched against him for alleged sexual assault. Farber is the proposal trustee.
Nygard Group, a Winnipeg, Manitoba-based clothing brand, was placed in receivership on March 18 on application by White Oak Commercial Finance, owed approximately $25.9 million (USD). The entities within the Nygard Group had each filed an NOI on March 9 but the automatic stay of proceedings did not apply to White Oak, which had issued its Notice of Intention to Enforce Security more than 10 days prior. In breach of several conditions under its credit agreement, the Nygard Group has lost the trust of its lenders. White Oak alleges that it has not been receiving timely or accurate information, and several significant decisions were recently made by the group without White Oak's consultation, including the decision to close its retail stores, distribution centres and website. The proposal trustee too has only received limited information, leading it to conclude that it was not in a position to advise that the group was acting with good faith or due diligence. Richter was appointed receiver. Counsel is Pitblado and Osler for the applicant and Thompson Dorfman Sweatman for the receiver.
Louis Garneau Sports, a Saint-Augustin, Quebec-based manufacturer of sports apparel and equipment, filed an NOI on March 3, listing $32.8 million in liabilities, including $11.4 million to RBC and $6.4 million to Investissement Québec. Founded in 1983 by Louis Garneau, a Canadian Olympic cyclist, the company quickly grew to become a leading brand in the cycling industry. The company attributes its current financial difficulties to challenging market conditions as well as the bankruptcies of two of its larger international customers. Raymond Chabot is the proposal trustee.
Senvion GmbH, a German manufacturer and seller of wind turbine equipment and technology with global operations including in Canada, had its German insolvency proceedings recognized in Canada under the CCAA on February 26. In April 2019, the company filed for insolvency in Hamburg under the German equivalent of debtor in possession restructuring proceedings. With the bulk of its business having been sold, the company has now moved into a liquidation phase where it is incumbent upon management to realize the value in the remaining assets. The company has asked for Canadian recognition of the German proceedings so that creditors will have access to the German claim process. Fuller Landau was appointed as information officer. Counsel is Spark for the company and Gardiner Roberts for the information officer.
Evergreen Consumer Brands, a Brampton, Ontario-based manufacturer and distributor of personal grooming products under brand names such as Daily Defence, Salon Selectives, and Silkience, was placed in receivership on February 13 on application by National Bank, owed approximately $4.4 million. The company, which defaulted on certain obligations under its credit agreement and forbearance agreements with National Bank, retained Alvarez & Marsal to assist it in obtaining replacement financing and to conduct a sale and investment solicitation process for the business ("SISP"). Although negotiations regarding proposals to purchase the business are ongoing, in light of the company's increasingly distressed financial situation, National Bank believes it is appropriate to appoint a receiver to take carriage of the SISP and identify the most favourable offer. Deloitte was appointed receiver. TGF is counsel to the applicant.
AAA Windows and AAA Holdings, two related Calgary, Alberta-based corporations, were placed in receivership on January 27 on application by Canadian Western Bank ("CWB"), owed approximately $4.7 million. While AAA Holdings effectively operates as a real estate holding company with title to a building located in Calgary (the "Property"), AAA Windows operates from leased space on the Property as a supplier, manufacturer, and installer of windows and doors. The overall downturn in Calgary's economy during the last several years has negatively impacted AAA Windows' business and cash flow. The court granted CWB's application for a pre-pack sale of both companies' assets. Hardie & Kelly was appointed receiver. Counsel is Burnet, Duckworth & Palmer for the applicant and Parlee McLaws for the receiver.
Morris Group of Companies, which consists of four Saskatchewan-based companies and an American branch in the business of manufacturing and distributing farm equipment, filed for protection under the CCAA on January 8, listing approximately $4.4 million in liabilities, including $2.1 million to De Lage Landen and $1.9 million to Kubota Canada. Morris Industries is the primary operating company and manufactures air carts, drills, seeders, and bale carriers. In recent years, the Morris Group has incurred significant losses due to several factors: the introduction of a new product line that experienced warranty issues which required a significant capital investment beyond foreseeable estimates; the Group's increased costs were accompanied by decreasing sales; and, as a result of declining financial results, the Group lost access to a factoring facility that had previously provided for the early payment of a substantial portion of its accounts receivable. Currently, each of the companies is unable to meet its obligations as they become due and is facing an imminent liquidity crisis. On January 16, the court granted the Group a stay of proceedings until March 27. BMO will be providing interim financing to the Group during the CCAA proceedings. Alvarez Marsal was appointed monitor. Counsel is McDougall Gauley for the Group, Burnet, Duckworth & Palmer for BMO, MLT Aikins for Alvarez & Marsal, Cassels Brock for De Lage Landen, and Miller Thomson for Kubota Canada.
Barrymore Furniture, a Toronto, Ontario-based manufacturer and retailer of high-end furniture with a history dating back to 1919, filed an NOI on November 29, listing $7.5 million in liabilities, including $3.7 million to HSBC and $454.5 thousand to BDC. Historically, the company achieved revenues of over $10.0 million in each of its fiscal years ended April 30, 2017 and 2018. From late 2018 to the fall of 2019, however, the company experienced a dramatic reduction in sales which caused substantive liquidity issues. In the last few months the company has been operating at unsustainable monthly losses and became overdrawn on its operating loan facility. The NOI filing is intended to give the company temporary relief from creditors to allow it to carry on business through the holiday season and canvas the market for potential buyers of its business and/or assets. Farber is the proposal trustee. Counsel is Loopstra Nixon for the company, Chaitons for the proposal trustee, TGF for HSBC and Lipman Zener & Waxman for BDC.
British Steel, one of Europe's leading steel makers, obtained Canadian recognition of its UK-based insolvency proceedings on November 13. Despite generating revenue of nearly £1.2 billion, the company lost nearly £19.0 million in its latest fiscal year, as the commercial environment in which it operated deteriorated as a result of, among other things, the uncertainty caused by the UK's decision to leave the European Union (Brexit). Rescue talks failed and on May 22, the UK Court issued an order for the company to be wound-up. Though British Steel does not have a place of business in Canada, it did sell products to Canadian purchasers. In the course of these sales, British Steel was assessed by CRA for GST/HST liabilities of approximately $850.0 thousand and is owed refunds from the CRA of approximately $527.0 thousand. CRA is holding these refunds and is threatening to take legal action to collect the assessed liabilities. In order to resolve these outstanding tax issues, recognition of the UK proceedings was sought. EY is the information officer. Stikeman Elliott is counsel for the applicant.