Atlantica Content Studios Inc., a Markham, Ontario-based company that provides retail clients with creation, design, photography, and production of digital and traditional creative content, including online content and traditional print flyers, filed an NOI on April 24, listing $2.5 million in liabilities. The COVID-19 shutdown of non-essential services resulted in a dramatic decrease in weekly sale flyer production and distribution and a corresponding reduction in retail customer’s requirement for new and creative sales content. Accordingly, major retail customers cancelled their contracts with the company, causing it significant cash flow constraints and financial difficulties. BDO is the proposal trustee. Counsel is Keyser Mason Ball for the company.
Composites Innovation Centre Manitoba Inc., a Winnipeg, Manitoba-based not-for-profit engineering firm that provides design, analysis, testing, and fabrication services to the manufacturing industry, filed for bankruptcy on April 14, listing approximately $1.5 million in liabilities. When the company was first formed, it was backed by Boeing Canada and a group of some of Canada's largest agricultural equipment manufacturers. However, the company's efforts to develop the supply chain necessary to make its work sustainable consistently proved unfruitful. Eventually, the company lost a significant amount of its public sector operating and project funding from the provincial and federal governments. Deloitte is the bankruptcy trustee.
Rosebud Creek Financial and 957855 Alberta, two corporate partners of the Metro 360 General Partnership, filed NOIs on April 6, listing over $65.0 million in liabilities, in response to significant financial challenges that Metro 360 began to face many years ago but which have been accelerated in light of recent global developments. Metro 360 is a Canadian marketer of information and entertainment products, including magazines, books, newspapers, and AV media. The COVID-19 outbreak has led to over 350 of Metro 360's retail customers temporarily closing, with many others not accepting deliveries. Book and magazine sales have declined drastically during this period and, as a result, Metro 360's supply and distribution lines have been brought to a complete standstill. In response, the partners implemented an expedited sale of Metro 360's magazine and book wholesale distribution business. The court approved an asset purchase agreement between Metro 360 General Partnership and Great Pacific Enterprises ("Purchaser), in which the Purchaser will acquire all customer and title records, magazine racks at Metro 360 customer locations, and the goodwill of Metro 360 in respect of its Canadian customers. The Purchaser will also make offers of employment to a significant number of Metro 360's employees. KSV is the proposal trustee. Counsel is Goodmans for the company and Bennett Jones for the proposal trustee.
Splend, a Mississauga, Ontario-based company in the business of arranging vehicle leases for on-demand drivers (e.g. Uber drivers), was adjudged bankrupt on April 3, listing approximately $7.2 million in liabilities, including $6.3 million to Element Fleet Management. The company, which currently has in excess of 400 customers, has been negatively impacted by the onset of social distancing requirements and other consequences of the COVID-19 pandemic. Due to the sudden and material decrease in the company's revenues, it is unable to generate sufficient cash flows to service its debts. Deloitte is the bankruptcy trustee. Counsel is Dentons for the bankruptcy trustee and Blakes for Element.
Accede Energy Services, a Lacombe County, Alberta-based integrated energy services company that provides oilfield equipment rentals and fire, safety, and medical aid services, was placed in receivership on March 23 on application by Sandton Credit Solutions Master Fund IV, owed approximately $28.8 million. In late 2016 and early 2017, Sandton took assignments of loans to the company from both ATB and Canadian Western Bank. The company had already defaulted on the loans prior to the assignments to Sandton, and additional defaults followed. As a result, and after a third forbearance agreement expired on February 14, 2020, Sandton issued a demand for repayment. FTI was appointed receiver. Cassels is counsel to the applicant.
Copperline Excavating, an Edmonton, Alberta-based utility contractor, was placed in receivership on February 21 on application by RBC, owed approximately $2.0 million. The company had filed an NOI on January 31 but subsequently advised RBC that it did not intend to file a proposal to its creditors. EY was appointed receiver. Counsel is Dentons for the applicant and Parlee McLaws for Accord Financial, owed approximately $1.5 million.
Campus Vibe, a Mississauga, Ontario-based student event organization and management platform, filed for bankruptcy on January 17, listing $109.5 thousand in liabilities. Farber is the bankruptcy trustee.
DGSTS Services Group, formally known as DGSTS Group, a British Columbia-based international engineering services company, was placed in receivership on December 20 on application by RBC, owed approximately $419.1 thousand. RBC also received judgment against the company’s guarantor, DGS Technical Services. RBC had granted the company certain credit facilities under a loan agreement. As security for this agreement, the company provided a general security agreement and two mortgages registered on title to commercial property it owned in Ottawa, Ontario. The company failed to fulfill its financial obligations to RBC under the loan agreement, and the guarantor did not make payment on account of its guarantee to RBC. Following service of the Application Record, counsel for the company advised RBC that refinancing would be available within a week. However, as of December 17, RBC has yet to receive a term sheet with proof of financing or any evidence of viable refinancing. Grant Thornton was appointed receiver. Counsel is Lerners for the applicant and Pelech, Otto, Powell & Ketsetzis for the company.
The Installation Group, a Sudbury, Ontario-based installer of telecommunications systems with an exclusive contract with Bell Canada for installation services across Northern Ontario, Northern Quebec, Manitoba and Saskatchewan, was placed in receivership on November 12 on application by BNS, owed approximately $599.0 thousand. Seeking growth, the company expanded its operations in or around 2016 to include the installation of satellite/internet services with new partners in rural areas. The expansion proved unsuccessful and by early 2018 the company had exhausted all of its financial resources. Shortly thereafter, management discovered that proper financial records were not being maintained by the company's internal accountant and payroll source deductions and sales tax had not been remitted since March 2017, resulting in an amount owing to CRA of approximately $1.7 million. A BIA proposal was filed by the company in December 2018 which necessitated the company obtaining a capital injection to, among other things, pay out BNS and pay off CRA's deemed trust claim within 6 months. None of the lenders approached were willing to finance the company, but one offered to purchase the company's assets as a going concern. The sale will be completed through a receivership. BDO is the proposal trustee and receiver. Counsel is Lipman, Zener & Waxman for the applicant, Chaitons for the BDO, Minden Gross for Firepower Capital and BLG for Bell Canada.
North American Fur Auction, an international fur auction house with a history dating back to 1670 and the historic Hudson's Bay Company, obtained protection under the CCAA on October 31. Based in Toronto, the company sells in excess of USD $200.0 million worth of fur products annually at the auctions it conducts. The company also lends funds to farmers/ranchers who use the loans to fund the development of minks. The farmers are then contractually bound to deliver those mink to NAFA for auction. The annual lending cycle ends around the end of November. Thereafter, the mink are harvested and turned into pelts for auction. Historically, the company has bridged the gap between lending and harvest with funds from a syndicate of lenders led by CIBC. The credit facilities typically range from $40.0 to $60.0 million, depending on the time of year. The syndicate made demand in the summer of 2019, however, and ultimately stopped funding in late September. Facing a looming liquidity crisis, the company negotiated an LOI with SAGA Furs, one of its principal competitors, to acquire certain of its loans. The proceeds from this transaction, along with DIP funding in the CCAA proceedings, will allow the company to harvest its current mink crop and thereafter reconsider its business operations. Deloitte was appointed monitor. KPMG is financial advisor to the company. Alvarez & Marsal is financial advisor to CIBC. Waygar Capital is providing a $5.0 million DIP loan. Counsel is Blaney McMurtry for the company, Miller Thomson for the monitor, TGF for BDC, Blakes for CIBC and Aird & Berlis for Waygar Capital.