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.
NTG Clarity Networks (TSX-V:NCI), a Markham, Ontario-based telecommunications company, was placed in interim receivership on October 9 on application by RBC, owed approximately $7.8 million. NTG, along with a related Egyptian company, provide network, IT, and infrastructure support to telecommunication service providers in Egypt, Saudi Arabia and elsewhere in the Middle East. Due to constrained liquidity largely caused by NTG’s inability to sell new software technology on which it had spent approximately $5 million to develop, the company was transferred to RBC’s Special Loans Department in August, 2016 and has remained there ever since. In 2017, it was discovered that NTG had overstated its accounts receivable by counting certain work in progress as receivables, resulting in a $2.2 million over-advance. The over-margin position has recently increased to approximately $3.7 million and RBC has learned that, among other things, two major contracts had been cancelled and the corresponding receivables written off, and numerous customers were disputing invoices. RBC therefore moved for the immediate appointment of an interim receiver to oversee collections and secure receipts until the time that a receivership application can be heard. Grant Thornton was appointed interim receiver. Aird & Berlis is counsel for the applicant.
Icon Stone & Tile, a Calgary, Alberta-based stone fabrication and installation business, filed for bankruptcy on September 3, listing approximately $2.8 million in liabilities, including $1.6 million to HSBC. Grant Thornton was appointed bankruptcy trustee.
Machine Works Industrial, a Fort Saskatchewan, Alberta-based contractor specializing in welding and steel fabrication, was placed in receivership on August 13 on application by RBC, owed approximately $2.0 million. Deloitte was appointed receiver. Counsel is Burnet, Duckworth & Palmer for the applicant and Duncan Craig for the receiver.
Schendel Mechanical Contracting, an Edmonton, Alberta-based mechanical contractor, was placed in receivership on July 19 on application by ATB Financial, owed approximately $18.1MM. One of Alberta's largest construction companies, the company had been successful for decades but hit a rough patch in late 2018 when work on one of its major projects, the Grande Prairie Regional Hospital, was halted by the Province of Alberta. The work stoppage affected Schendel's profitability, eventually causing it to default on amounts owing to ATB. In March 2019, ATB issued demand letters and notices of intention to enforce security. In response, the company filed an NOI and has been working hard to find a lifeline that would allow it to continue in business. On July 10, it filed a proposal to ATB and its other creditors. ATB immediately moved for an order deeming the proposal to be refused and an order appointing a receiver. ATB's position was that it had a veto over the proposal by the solo nature of its secured claim and it intended to vote against the proposal, based on a host of factors, including its perception that it would fare better in a bankruptcy or receivership than under the proposal. The orders were granted and PwC was appointed receiver. Counsel is McCarthy Tétrault for the applicant, Bennett Jones for the company, Miller Thomson for the receiver and MLT Aikins for the proposal trustee, Grant Thornton.