Aluminart Products Limited, Arcor Windows & Doors Inc., and N.A.P. Windows & Doors Ltd., Ontario companies that manufacture and distribute storm doors, patio doors, and windows to retailers such as Loews and Home Hardware, were placed in receivership on March 29 on application by RBC, owed approximately $5.2 million (CAD) and $24.5 thousand (USD) under a loan agreement. Despite multiple forbearance extensions, the companies have yet to repay their indebtedness to RBC. In addition, the companies failed to deposit $475.0 thousand into their RBC bank accounts as promised. msi Spergel (GRIP) was appointed receiver. Counsel is Minden Gross for the applicant, Miller Thomson for the companies, Harrison Pensa for the receiver, and Lipman Zener Waxman for BDC.
Morris Group of Companies, which consists of four Saskatchewan-based companies and an American branch in the business of manufacturing and distributing farm equipment, had its sale to 102114983 Saskatchewan Ltd. in the CCAA proceedings (the "MEL Transaction") approved and a receiver was appointed to carry out the final administrative duties and satisfy the conditions of the MEL Transaction. BMO also brought applications for bankruptcy for certain entities in the Morris Group of Companies (the "Dormant Companies"). Since the bankruptcy orders were granted, the CCAA proceedings will be terminated in regard to the Dormant Companies and a bankruptcy trustee will be appointed. Alvarez & Marsal was appointed receiver and bankruptcy trustee. Counsel is McDougall Gauley for the Group, Burnet, Duckworth & Palmer for BMO, and MLT Aikins for Alvarez & Marsal.
Toolplas Systems Inc., and Tool Processing Solutions Inc. (o/a TPS Global) (collectively the "Company"), two Oldcastle, Ontario-based manufacturing companies, were placed in receivership on March 3 on application by TD, owed approximately $18.1 million. The Company also owes approximately $5.9 million to BDC and a further $6.9 million to its unsecured creditors. Deloitte was appointed receiver and manager. Miller Thomson is counsel to the applicant.
Atis Group, a group of window and door manufacturers whose products were sold under various brands including Laflamme, Vinylbilt, Solarcan, Vimat, Supervision, Melco, Allsco, and Altek, filed for protection under the CCAA on February 19. As of December 31, 2020, Atis Group operated seven manufacturing plants, had 26 stores located across Canada, and generated revenues of over $115.0 million. Between the time of its creation in 2004 and 2017, Atis Group achieved growth through more than 20 acquisitions. However, certain past acquisitions had resulted in a significant decrease in revenues. In particular, two of these companies — Solarcan Architectural and Allied Doors and Windows — were ultimately shut down, while another company was sold at a very low price. In 2018, costs began to increase significantly due to higher prices of glass and an increase in the rejection rate caused by aging manufacturing equipment. Moreover, the Ontario plant, which used to be very profitable, suffered a rapid decrease in sales starting in 2019 when several major clients were lost to a new competitor. Finally, once sites reopened after quarantine measures were lifted, Atis Group was unable to hire foreign workers as it had historically done. As a result of these factors, Atis Group suffered a loss of more than $24.0 million as of 2020. Without a capital injection, Atis Group currently does not have sufficient resources or the ability to generate sufficient funds to pay its suppliers and creditors. During these CCAA proceedings, Scotiabank — Atis Group's current first-ranking secured lender — will be providing up to $6.3 million in interim financing. Raymond Chabot was appointed monitor. Richter is advisor to Scotiabank. Counsel is Fasken for the monitor, McCarthy Tétrault for the debtors, BLG for Scotiabank and Gowling WLG for Investissement Quebec.
JD Norman Canada, ULC, a Windsor, Ontario-based manufacturer of highly engineered metal components for the automotive industry, was placed in receivership on February 12 on application by Callidus Capital Corporation ("Callidus"), owed approximately $146.0 million (USD). The company's largest customer, General Motors ("GM"), representing close to 100% of its business, terminated its business relationship with the company and, as such, the company is no longer able to operate as a viable going concern. In January 2020, the company indicated to GM that it was experiencing severe financial difficulty and would be unable to remain in business without obtaining certain financial accommodations from GM and Callidus. Subsequently, GM entered into an agreement with the company and Callidus in which GM agreed not to resource any of GM's business to a different supplier until at least February 2023. However, in November 2020, after GM claimed that the company had breached its obligations under this agreement, GM notified the company of its intention to resource a substantial portion of GM's business to a new supplier. KSV Advisory was appointed receiver. Counsel is McMillan for the company, Dickinson Wright for the applicant, Osler for the receiver, and Norton Rose for Bank of America, the operating lender.
Rockshield Engineered Wood Products ULC, a Cochrane, Ontario-based manufacturer of plywood used to make a variety of products including furniture and cabinetry, filed an NOI on February 8, listing approximately $15.1 million in liabilities, including $2.9 million to BNS. Due to the seasonal variations in logging roads and poor transport truck access during the warmer months, the company purchases the majority of its raw materials in the winter. During the winter months, the company stockpiles approximately $100.0 thousand worth of logs per week over and above its manufacturing needs. Since the company's expenses during the stockpiling period exceed its revenue from operations, it has historically financed this "bulge" with capital from shareholders. This year, however, the company's shareholders have declined to extend financing for the bulge. In addition to the company's pending liquidity crisis, BNS has issued a demand on its credit facilities, asserting a breach of a debt service ratio covenant. During these proceedings, BNS is providing DIP financing to the company. Dodick & Associates is the proposal trustee. Counsel is Weisz Fell Kour for the company, Pallett Valo for the proposal trustee and Miller Thomson for BNS.
Kanwal Inc., which is part of an international corporate group based in Magog, Quebec, whose commercial operations include the production of specialty rubber and plastic automotive sealing systems, filed for protection under the CCAA on January 29, 2021, listing approximately $21.6 million in liabilities, including $12.2 million to First West Capital Union and $4.3 million to BMO. In July 2020, the company filed an NOI under the Bankruptcy and Insolvency Act (the "BIA"). Despite multiple extensions of time for filing a proposal, the company was unable to make a proposal to its creditors before the deadline to do so expired on January 30, 2021. As such, the company sought an order authorizing the BIA proceedings to continue under the CCAA. In the longer term, the company is confident that the CCAA proceedings will permit it to complete a proposed senior secured asset-based financing with Waygar Capital Inc. PwC was appointed monitor. Woods is counsel to the company.
Ellis Fabrication Inc. et al., an Innisfail, Alberta-based company that manufactures heavy machinery attachments and trench safety systems, was placed into receivership on December 3 on application by TD, owed approximately $5.7M. KPMG was appointed receiver. Counsel is MLT Aikins for the applicant, Burnet, Duckworth & Palmer for the receiver, and Caron & Partners for the company.
Welland Forge Corp., a Welland, Ontario-based manufacturer of custom metal forgings, filed an NOI on October 27, listing approximately $11.3 million in liabilities. Welland Forge Corp.’s biggest customers have historically been in the automotive industry. Its customers are particularly vulnerable to the volatile nature of the oil and gas industry, and the pandemic has exacerbated that volatility. Earlier in the year, the company suffered the loss of its major customer, which accounted for approximately 65% of the company's sales, to an overseas supplier. Accordingly, the company has identified the need to wind down its operations. The company previously terminated its approximately 60 employees. BDO is the proposal trustee. Counsel is Miller Thomson for the proposal trustee and Madorin Snyder for the companies.
G.I. Sportz Inc., a Montreal, Quebec-based manufacturer of high-quality paintball products, along with several of its US and European affiliates, were placed in receivership on October 15 on application by GIS Debt Acquisition Partnership ("Partnership"), owed approximately $29.4 million (USD). The company's business was already under considerable stress prior to the emergence of the COVID-19 pandemic, having incurred losses totaling over $45.0 million (USD) since January 2018. Since paintball is a social sport played by a large number of participants, often in teams and in relatively confined areas, the COVID-19 pandemic further exacerbated the company's financial issues due to Canadian and US government policies mandating social distancing. Kore Outdoor Inc., a party related to the Partnership, has agreed to purchase substantially all of the company's Canadian and US assets in exchange for assuming the secured obligations owed by the company to the Partnership. KSV was appointed receiver. Counsel is Davies for the applicant and Cassels and Lapointe Rosenstein Marchand Melançon for the receiver.