William Peak Co-Operative Homes, a social housing property located at 1990 Whites Road, Pickering, Ontario, was placed in receivership pursuant to the Housing Services Act on July 22 on application by the Regional Municipality of Durham. An auditor's management letter issued in January 2020 noted significant deficiencies in the internal controls of the co-op's finances, including those related to conflicts of interest, financial statement accuracy, housing charges arrears and control over credit cards. In response, the municipality, as the designated service manager, appointed Deloitte as interim receiver in February 2020. Deloitte reported several areas of concern, including payments to parties related to board members, payments to contractors where payments were not commercially reasonable, credit card purchases using the co-op's card that did not appear to reflect legitimate expenses and potential misappropriation of housing charge payments. In June, the Region determined that a court-appointed receivership was required to finish stabilizing the co-op's operations and locate and train new members to become the co-op's new board of directors. Deloitte is the receiver. Blaney McMurtry is counsel for the receiver.
Upwood Park & Salvador Del Mundo Co-operative Homes, a social housing property located at 298 Queens Drive, North York, Ontario, was placed in interim receivership pursuant to the Housing Services Act on July 16. BDO was appointed interim receiver by the City of Toronto and is tasked with stabilizing the operations of the co-op.
Camilla Court Homes, the registered owner of two properties in Mississauga, Ontario municipally known as 2371 Camilla Road and 180 Mateo Place, was placed in receivership on July 2 on application by C&K Mortgage Services Inc., owed approximately $2.6 million. Rosen Goldberg was appointed receiver. Dickinson Wright is counsel for the applicant.
GFA World, a Hamilton, Ontario-based Christian non-profit organization that is focused on raising donations in Canada which can be used to fund charitable works in South Asia, obtained protection under the CCAA on June 26. The decline in donations, which comprises the organization's primary source of revenue, has been caused by the COVID-19 crisis as well as the negative publicity caused by various class action proceedings commenced against Gospel for Asia, another Christian charity related to GFA World. In 2017, a class action was commenced against Gospel for Asia alleging financial impropriety. Subsequently, donations to the organization declined by approximately 18%. In 2019, a settlement of the class action was approved, in which Gospel for Asia agreed to pay $37.0 million (USD) without any admission of wrongdoing. In February 2020, a new class action claiming $170.0 million was commenced in Nova Scotia against the organization and Gospel for Asia alleging fraudulent misrepresentation and improper use of donated funds. Without the protection of a CCAA proceeding, the organization's ability to attract donations and conduct its charitable works will be greatly diminished. PwC was appointed monitor. Goodmans is counsel to the company.
New Tecumseth Land Corporation, a company owning real property located at 6485 14th Line, Alliston, Ontario, was placed in receivership on June 1 on application by FirstOntario Credit Union, owed approximately $6.5 million. Spergel (GRIP) was appointed receiver. Flett Beccario is counsel for the applicant.
Eagle Q Partners Inc., a Vancouver, British Columbia-based company founded by Chris Jin, was placed in receivership on May 26 on application by Hong Liu and Meng Rui Li. The applicants allege that it is unclear what the company's business is other than having advanced considerable sums of money to the Westside Preparatory School (the "School"). Both the company and Jin, a former director of the Westside Preparatory Society — the not-for-profit society which governs the School — have been the subjects of various lawsuits, including an action against Jin alleging fraud, deceit, and fraudulent misrepresentation. These civil actions and the company's mismanagement have caused operating problems for the School, which owes the company approximately $4.1 million. In light of such circumstances, it appears the assets over which the applicants have security are at risk of being dissipated. Multiple actions have been commenced by the company's creditors and the applicants allege that Jin appears to be taking steps which may compromise the company's assets. FTI was appointed receiver. Fasken is counsel to the applicants.
Carriage Hills Vacation Owners Association (the "Association"), a not-for-profit corporation made up of approximately 9,000 interval owners who own an interest in Carriage Hills Resort — a timeshare resort located in Horseshoe Valley, Ontario — had an administrator appointed under s. 101 of the Courts of Justice Act over its assets and the land on which the resort operates. The Association, which incurred an operating deficit between 2015 and 2018, attributes its financial issues to various factors. The market for timeshares has declined in the last several years, and there are a number of unit holders who have abandoned their units and refuse to pay their share of the operating costs. At the same time, as the resort continues to age, the Association continues to incur increasing capital expenditures to maintain the property. These difficulties have been exacerbated by the COVID-19 pandemic as owners are not allowed to use their timeshare intervals until at least June. Due to its corporate structure as a non-share corporation, the Association does not have a viable way to remedy the underlying issues outside of a court-supervised restructuring. The Association intends to devise a process to address the delinquent owners and allow non-delinquent owners to "opt-out" and relinquish their interest in the resort. The resort's neighbouring "sister" resort, Carriage Ridge Resort — which has approximately 4,000 members — is in the same situation and its members' association, the Carriage Ridge Owners Association, has applied for identical relief in separate proceedings. The application hearing was attended by approximately 1,000 people via Zoom judicial video conference. BDO was appointed administrator. Counsel is TGF for the applicants, Aird & Berlis for the administrator and Blaney McMurtry for certain individuals.
Flighthub Group Inc., a Montreal, Quebec-based online travel agency powered by proprietary technology platforms, obtained protection under the CCAA on May 8. Since 2012, the Group has experienced significant growth and now has business relationships with more than 200 airline companies around the world. However, monthly revenues plummeted when the COVID-19 pandemic broke out and brought the travel industry to a standstill. In response to the rapid decline in revenue resulting from travel restrictions, the company implemented several cost-saving measures, including downsizing its Canadian and American workforces. Despite these efforts, the Group recorded a $8.0 million loss in March. In addition to these financial difficulties, the Group is also currently involved in several lawsuits and investigations regarding certain of its business practices, such as customer complaints over cancellation policies and fare increases. MNP was appointed monitor. Counsel is Stikeman Elliott for the Group and Dentons for the monitor.
SNFW Fitness B.C. Ltd., which operates 29 fitness facilities in British Columbia, filed an NOI on April 3, listing approximately $35.4 million in liabilities, including $32.0 to BMO. Founded in 2009 through a merger between Fitness World and Steve Nash Sports Club, the company's fitness facilities currently do business as "UFC Gym" and "Steve Nash Fitness World and Sport Club." On March 17, the company issued a notice to all of its members that due to the Province of BC limiting gatherings of 50 people to slow the spread of COVID-19, all facilities would be shut down effective immediately. Subsequently, the company terminated all of its staff except a handful of key personnel. The company's Board of Directors estimates that the company will require an equity injection of over $10.0 million to fund COVID-19 shutdown costs and operating losses to get a break-even level after COVID-19 restrictions are lifted. The company is now seeking court approval of a sale and investment solicitation process. The Bowra Group is the proposal trustee. Counsel is Lawson Lundell for the company and Dentons for BMO.
The Office de la protection du consommateur has appointed PwC as the administrator for claims filed with the Compensation Fund for Customers of Travel Agents ("CFCTA") in connection with the COVID-19 pandemic. Travellers who purchased tourism services such as accommodations, cruises, excursions, etc. from a travel agent licensed in Quebec are covered by the CFCTA's protection. The CFCTA may reimburse tourism services that have been paid for but not received. It may also be used to compensate customers who have had to extend their stay, in particular where their flight has been cancelled.