The Kraus Group

The Kraus Group, a Waterloo, Ontario-based manufacturer of premium carpet for the commercial and residential market, obtained protection under the CCAA on September 11, owing approximately $48.2MM to Wells Fargo, its senior secured lender. Established in 1959, the Group comprises 12 entities and operates two large carpet-manufacturing and logistics facilities. The Group also has two business divisions: the manufacturing of broadloom carpets ("Broadloom Business"), which accounts for 46% of its revenues, and the distribution and sale of flooring products ("Flooring Business"), which accounts for 54%. Over the last five years, the Group has sustained substantial losses for several reasons. First, its performance was negatively impacted by the downturn in the carpet manufacturing industry due to a shift in consumer preferences to hard surface flooring and the availability of cheaper broadloom carpeting from China. Second, the Group faces significant fixed costs, including those associated with maintaining and operating its facilities. In March 2018, Hilco UK - the sole shareholder of Pinnacle Capital Resources, who is the general partner of Red Ash Capital Partners, the Group's junior secured creditor who is owed $100.0MM - engaged Deloitte Corporate Finance to assist the Group with marketing and sale of the Broadloom Business. However, due to its dire financial circumstances and the lack of a going concern transaction, the Broadloom Business ceased activity on September 8, affecting 256 workers. Florida-based QEP will acquire substantially all of the assets related to the Flooring Business. This sale provides for the continued employment of 71 Canadian employees and a cash inflow that can be used to immediately reduce the indebtedness owed to Wells Fargo. Deloitte was appointed monitor. Counsel is Cassels Brock for the Group, Miller Thomson for the monitor, and Bennett Jones for Wells Fargo and QEP.

Niska North

Niska North, a Chapleau, Ontario-based company that carries on business as a sawmill manufacturing cedar lumber products, was placed in receivership on August 24 on application by Northern Ontario Heritage Fund Corporation, owed approximately $2.1MM. The company ran into business difficulties in 2008 almost immediately after it purchased a sawmill plant formerly owned by Domtar, citing unfavourable market conditions and lack of profitability. In December 2010, the company completely ceased operations, shutting down the sawmill and laying off all its staff. While the company's manager has made several efforts over the last seven years to find a buyer, they have been unsuccessful and the sawmill is currently abandoned. The court approved a sales process for the sawmill and appointed A. Farber & Partners as receiver.

Greatex Mills

Greatex Mills, a Montreal, Quebec-based manufacturer and distributor of home furnishing fabrics, filed an NOI on June 13. Richter is the proposal trustee.

Aspen Air

Aspen Air, a Calgary, Alberta-based manufacturer and distributor of industrial gases, and Aspen Air U.S., filed NOIs on June 6, respectively listing $11.2MM and $7.5MM in liabilities. Deloitte is the proposal trustee.


Ladacor, a Calgary, Alberta-based developer, manufacturer and supplier of advanced modular buildings and structures from shipping containers throughout North America, was placed in receivership on May 18 on application by BMO, owed approximately $4.7MM. Alvarez & Marsal was appointed receiver. Dentons is counsel to the applicant.

Greencore Composites

Greencore Composites, a Sarnia, Ontario-based manufacturer of natural fiber reinforced thermoplastic materials, was placed in receivership on April 16, listing approximately $1.2MM in liabilities. Growthworks Commercialization Fund, Wayne Meddever and Ian Inch appointed Dodick Landau as private receiver.

Taylor Steel and Stainless

Taylor Steel and Stainless, a Boucherville, Quebec-based company that specializes in welding and metal manufacturing, filed for bankruptcy on April 10, listing $227.4M in liabilities, including $103.7M to Revenue Quebec. MNP is the bankruptcy trustee.

HB Solar Canada

HB Solar Canada, a Concord, Ontario-based supplier of photovoltaic/solar energy array mounting systems and related equipment, filed an NOI on April 10, listing $2.9MM in liabilities, including $800.0M to RBC. By 2016, the company had reached the number one position in the Ontario market for solar rooftop racking. However, a confluence of factors eventually led to its insolvency. First, the local market for solar rooftop systems contracted by approximately 80% when changes were made to the Feed-In Tariff Program, which was launched in 2009 to encourage and promote greater use of renewable energy sources. Second, the company faced increased competition, thus forcing it to reduce prices and earn lower margins. Finally, it experienced a rise in bad debt write-offs and an accompanying reduction in available net working capital. Although the company has increased its efforts to attract additional capital from lenders and investors, no one is willing to invest further if there is no formal restructuring. As a result of these issues, the company now faces a liquidity crisis and is unable to maintain its obligations to creditors. Dodick Landau is the proposal trustee. Pallett Valo is counsel to the company.

HCT Metal Manufacturing

HCT Metal Manufacturing, a Calgary, Alberta-based company, was placed in receivership on April 4 on application by Canadian Western Bank. EY was appointed receiver. Counsel is Faskens for the applicant and Walsh Law for the company.

BionX Canada

BionX Canada, an Aurora, Ontario-based company that designs, manufactures and sells electronic propulsion systems for bicycles, was placed in receivership on February 27 on application by Stronach Consulting, owed approximately $21.9MM. In February 2018, as the company's financial situation was deteriorating, General Motors - who was a primary customer - notified the company that it was considering commencing a claim for $5.3MM (USD) for alleged breaches of their purchase contract. In addition to these existing financial difficulties, the company failed to find a purchaser of its shares or assets. Stronach was subsequently unwilling to provide further funding to the business outside of a receivership proceeding to market. During the proceedings, it will provide funding of approximately $1.3MM to administer the receivership and execute the proposed sales process. Grant Thornton was appointed receiver. Counsel is Stikeman Elliott for the applicant, Cassels Brock for the company, Speigel Nichols Fox for GM and Brauti Thorning Zibarras for the receiver.

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