Telewizja Polska Canada Inc. (AKA Polish Television Canada Inc.), a Mississauga, Ontario based distributor of Polish language television and radio programming, filed an assignment in bankruptcy on November 23 due to the expiring of the distribution license and loss of its revenue stream. Liabilities are listed at approximately $1,064,764. BDO is the bankruptcy trustee. By Dina Milivojevic
Media Central Corporation Inc., a Toronto, Ontario-based media company, filed an assignment in bankruptcy on March 25, citing its inability to to meet its financial obligations as they come due. The filing does not affect Media Central's subsidiaries, Vancouver Free Press Publishing Corp. and Now Central Communications Inc., which publish the Georgia Straight and NOW Magazine. The publications were distributed for free on each city’s mass transit routes. With the major decline in ridership because of COVID, advertising revenues dropped dramatically and the operations could not be sustained in their previous form. The company defaulted on its secured senior debentures in the amount of $1.1 million and was unable to raise any more money. Accordingly it filed an assignment in bankruptcy. Ira Smith Trustee & Receiver Inc. is the bankruptcy trustee. By Dina Milivojevic
Breakthrough Enterprises Inc. and certain related entities (collectively, “Breakthrough”) each filed an NOI on February 1. Breakthrough is a Toronto, Ontario-based television production company that produces and distributes television programming worldwide. At the outset of the COVID-19 pandemic in 2020, Breakthrough experienced interruptions in its audiovisual media productions. When shooting recommenced after the delay, Breakthrough incurred significant additional and duplicative costs that negatively impacted Breakthrough’s overall cash flow. Revenues were temporarily impacted as a result of the lack of new sales during the first year of the COVID-19 pandemic. Further, the cost and challenges of implementing and maintaining safety measures on ongoing productions had a negative impact on cash flow and the overall profitability of productions generally. As a result, Breakthrough was forced to lay off and terminate a number of its employees. It sought and was granted approval of a sale of certain development assets to a corporation controlled by Ira Levy, a minority shareholder of Breakthrough Enterprises Inc. The purchased assets consist of concepts that have not yet commenced production, and that Levy was responsible for as Executive Producer. Dodick is the proposal trustee. Counsel is Weisz Fell Kour for Breakthrough. By Dina Milivojevic
Westbury National Show System Ltd., one of Canada’s largest professional audio-visual integration and full-service live event production companies, was placed in receivership on October 9 on application by BMO, owed approximately $10.1 million. Starting in October 2018, the company's financial performance had begun to deteriorate and BMO requested that the company address the need for an imminent capital injection. The company's existing financial difficulties were exacerbated by the COVID-19 pandemic, which rendered the company's live events business inactive and created further liquidity pressure on the business given the lost revenue and ongoing overhead expenses. Currently, there are two sales and liquidation processes being run in parallel for the company's assets. Grant Thornton was appointed receiver. Counsel is Gardiner Roberts for the applicant and Aird & Berlis for the receiver.
Cirque du Soleil, a Montreal, Quebec-based international live entertainment media company, obtained protection under the CCAA on June 30, listing approximately $1.6 billion (USD) in liabilities. Founded in 1984, the company is known for its circus performances, which it performs in custom-built, partner-hosted resident venues and through touring in different cities around the world. Over the past few years, the company has been responsible for the majority of the top 10 live shows in Las Vegas, accounting for almost half of the total Las Vegas box office sales. The company has seen its business operations severely impacted by the global COVID-19 pandemic, which has left the company with no other option but to call for an unprecedented halt in activity until the pandemic is controlled. Following the closure of all its shows worldwide, the company's revenue income entirely vanished and the company had no choice but to make significant temporary employee reductions to its nearly 5,000-person staff, impacting 95% of its workforce. Even before the pandemic struck, however, the company was already heavily indebted to its creditors following a series of major acquisitions. While the company hopes to be able to restart its operations as soon as possible, it is currently unable to generate any revenues, thereby preventing it from meeting its obligations as they become due. After carefully considering its options, the company made the difficult decision to terminate the employment of a majority of its employees, including the already laid-off employees. A group of existing investors, with backing from Investissement Québec, the Quebec government's investment wing, has tabled a bid to take over the company, inject $300.0 million (USD), and provide financial support for 3,500 laid-off employees. EY was appointed monitor. Counsel is Stikeman Elliott for the company, Fasken for the monitor, Norton Rose Fulbright for Investissement Québec, McMillan for RBC, the administrative agent for the first lien lenders, Goodmans for an ad hoc group of first and second lien lenders and Langlois for the Ad Hoc Committee of Independent Second Lien Lenders.
Kew Media Group (TSX:KEW), a Toronto, Ontario-based group that develops, produces, and distributes multi-genre audiovisual content worldwide, was placed in receivership, along with two of its subsidiaries, on February 28 on application by Truist Bank in its capacity as the agent for a syndicate of lenders comprising Truist, BMO, and TD (collectively, the "Lenders"). The production company, which was behind shows such as Dance Moms and The Inventor, owes the Lenders approximately $113.8 million. In November 2019, the company announced that its CFO, Geoff Webb, had supplied the Lenders with reports containing inaccurate information regarding working capital. As a result, the company defaulted on its $110.0 million credit facility. In January, the company further announced that its auditor, Grant Thornton, had withdrawn various audit reports as it could not rely on representations made by Mr. Webb. Shortly after, the Ontario Securities Commission issued a temporary cease order of the company's shares. Although TD Securities has been running a sales process for the company, it is apparent from the offers received that the Lenders will still suffer a significant shortfall on the company's debt. FTI was appointed receiver. Counsel is Dentons for the applicant, Goodmans for the group, Torys for the receiver, and Miller Thomson for BMO.
Groupe Capitales Médias, a Quebec City, Quebec-based media company, filed an NOI on August 19, listing approximately $25.9 million in liabilities, including $8.0 million to Investissement Québec. The company was created in 2015 to purchase all the daily newspapers outside of Montreal that were at the time owned by Gesca, a Power Corporation entity. The newspapers are Le Soleil (Québec), Le Quotidien (Saguenay), Le Nouvelliste (Trois Rivières), La Tribune (Sherbrooke), La Voix de l'Est (Granby) and Le Droit (Ottawa). The sole shareholder is Martin Cauchon, a former Federal Minister of Justice. Attributing its financial difficulties to an erosion of advertising revenue to global digital players such as Facebook and Google, and to a lesser extent lower circulation, the company has been unprofitable in the past three years and has run out of cash. PwC is the proposal trustee and interim receiver and will be launching a sales process for the business in September. Counsel is Stikeman Elliott for IQ, DS Avocats for the company and McCarthy Tétrault for PwC.
Intercity Broadcasting Network, a Toronto, Ontario-based company that operates the G98.7 radio station, was placed in investigative receivership on June 3 on application by Jamrock Broadcasting and Delford Blythe. Officially launched in 2011 by Fitzroy Gordon, the radio station focused on programming for the Caribbean-African community in the Greater Toronto Area. Blythe, a minority stakeholder and former senior executive of the station, brought an application in 2016 for relief from corporate oppression after he was stripped of his management roles after discovering what he alleges was financial mismanagement of the station by Gordon. Blythe alleges that Gordon was, among other things, directing revenue from online web advertisements to himself personally. The matter was adjourned sine die after Gordon suffered a stroke in 2017. Following Gordon's death in April 2019, Blythe learned that the radio station is in the midst of a serious financial crisis and is in danger of losing its radio license for failing to pay required CRTC obligations. The receivership will bring stability to the situation as the station charts its way forward. Farber was appointed investigative receiver. Carlson & Kociper is counsel for the applicants.
Mundo Media, a Richmond Hill, Ontario-based advertising technology company that offers mobile marketing expertise to its customers, was placed in receivership on April 9 on application by RBC, owed approximately CAD $43.6MM and USD $25.7MM. Employing approximately 45 employees across Canada, the US and Luxembourg, the company has been experiencing declining revenue in the past year as result of, among other things, increasing scrutiny on the online advertising industry and Facebook's deletion of over 1.5 billion fake accounts, which has reduced the activity that leads to revenue generation for the company. RBC provided time for the company to find a solution to its liquidity constraints, but after months of effort, the company's best option was a letter of intent for the sale of the business which would see the bank incur a significant shortfall. EY was appointed receiver. Counsel is TGF for the applicant and Norton Rose Fulbright for the company.