Terra Nova Construction, a Calgary, Alberta-based construction company, was placed in receivership on May 17 on application by RBC, owed approximately $5.5MM. In addition to its failure to comply with its financial reporting requirements and its failure to advise the bank of any unfavourable change in its financial position, RBC suspected that the company had opened up another bank account for its day-to-day banking with a different financial institution, in breach of its loan agreement. Grant Thornton was appointed receiver. Counsel is McMillan for the applicant and Parlee McLaws for the company.
Inara, an Edmonton, Alberta-based company which owns and operates a Quality Inn Hotel in Whitecourt, Alberta, was placed in receivership on May 3 on application by ATB Financial, owed approximately $1.1MM. The 81 room hotel was opened in 1956. In addition to the $1.1MM owed to ATB, Inara also owes the Town of Whitecourt approximately $452.6M in unpaid property taxes, penalties and interest. Hardy & Kelly was appointed receiver. Dentons is counsel for the applicant.
Trident Exploration, a Calgary, Alberta-based natural gas production company, was placed in receivership on May 3 on application by the Alberta Energy Regulator's Orphan Well Association. The AER had been in discussions with the company since February 2019 regarding its financial difficulties as well as a potential debtor-led restructuring of the company's business and operations. On April 29, the company advised the AER that it may be unable to continue operations at its licensed sites. The AER responded by issuing an order directing the company to address end-of-life obligations associated with 4,400 energy licensed sites, either by decommissioning those sites, posting financial security or transferring the sites to responsible energy companies. With no funds to even enter into creditor protection, the company ceased operations the next day, terminating its 33 employees and 61 contractors and leaving its wells to the care of the AER, including proximately 1,500 wells that were not shut-in and continue to produce. It is estimated that the company's abandonment and reclamation obligations total approximately $329.0MM. The company also owes its secured lenders an additional $90.0MM and has unpaid property taxes of over $2.0MM. In the interest of public safety, the Orphan Well Association applied for a receiver to be appointed to ensure that the company's wells are properly cared for and maintained and shut-in where necessary. The Orphan Well Association is also hoping that, where possible, wells and other oil and gas assets can be sold to responsible producers to avoid having further assets designated as orphan wells. PwC was appointed receiver. Counsel is BLG for the applicant, Norton Rose Fulbright for the company, Bennett Jones for the receiver, Torys for Aimco, Blakes for ATB Financial and Brownlee for Stettler and Woodlands Counties
Solo Liquor Stores, a Calgary, Alberta-based liquor retailer, was placed in receivership on May 1 on application by ATB Financial, owed approximately $29.5MM. Founded in 1996, the company has grown to become the largest private liquor retailer in Alberta with over 40 locations across the province. The company has been experiencing significant cash flow issues for a number of months and was in default on its loans to both ATB and Crown Capital. Pursuant to a forbearance agreement with ATB, the company engaged Eight Capital to run a sales process for the business but no transaction was completed. Anticipating a shortfall on its loan, ATB decided that the appointment of a receiver would be the most efficient and cost-effective manner to maximize recoveries. FTI was appointed receiver. Counsel is Blakes for the applicant, McCarthy Tétrault for the company, Torys for the receiver and MLT Aikins for Crown Capital.
Heavy North Construction, an Edmonton, Alberta-based civil construction company, was placed in receivership on April 16 on application by 1056420 Alberta Ltd., owed approximately $2.4MM. KPMG was appointed receiver. Counsel is Bennett Jones for the applicant, Blakes for ATB and Osler for the receiver.
Patriot Equipment, a Medicine Hat, Alberta-based oil and gas field services supplier, was placed in receivership on April 11 on application by RBC, owed approximately $892.4M. In or about late 2018 and early 2019, RBC discovered that Patriot had failed to disclose its liability for an oil spill on a third party's property, as well as committing several other acts of default. The receivership application was adjourned in early March to permit Patriot time to payout the RBC indebtedness, however proposed financing fell through and the amount was not repaid. KPMG was appointed receiver. Counsel is Osler for the applicant and BDP for the receiver.
Strategic Oil & Gas (TSX-V: SOG), a Calgary, Alberta-based junior oil and gas company, along with its wholly owned subsidiary, Strategic Transmission, obtained protection under the CCAA on April 10. Focused primarily on oil and gas development in Northern Alberta, the company cites several key factors that have led to its current financial position, including deteriorating differentials on Canadian oil prices and political uncertainty with respect to pipeline approvals at the Federal level. In June, 2018, the company entered into a transaction to sell certain of its assets. Despite the sale closing, however, the proposed purchaser was unable to meet the Liability Management Ratio requirements of the Alberta Energy Regulator to facilitate the necessary license transfers. As a result, Strategic was forced to unwind the transaction, further weakening its financial position. With no capital available to fund further development and drilling improvements, the company will look to complete a sale and investment solicitation process while under creditor protection. KPMG was appointed monitor. Counsel is Dentons for the applicant and Torys for the monitor.
Devlin Construction, an Alberta, Edmonton-based construction company, was placed in receivership on April 9 on application by ATB, owed approximately $5.6MM. The company ran into financial difficulties with the downturn of the oil and gas industry as the number of jobs and margins on those jobs decreased. In February, the company filed an NOI in an attempt to restructure its affairs, seeking primarily to sell redundant assets and obtain interim financing. The company's request for a second extension of time to file a proposal was not supported by ATB or the Bowra Group, its proposal trustee, who reported that efforts to formulate a proposal were not progressing in an efficient and timely manner primarily because of the company's directors lack of cooperation and inability to work together. The court did not grant the extension and subsequently appointed PwC as receiver of the company. Counsel is Blakes for ATB and Emery Jamieson for the company.
Innova Global, a Calgary, Alberta-based provider of noise control and waste recovery system solutions for industrial sites worldwide, was placed in receivership on April 1 on application by ATB, owed together with a syndicate of other lenders approximately $74.2MM. In February 2019, the company advised ATB that it anticipated defaulting on its credit agreement because it was unable to make a required repayment of $2.5MM due on February 29. Despite several extensions and extensive negotiations, the parties have been unable to find a collaborative solution to address the liquidity challenges. When TriWest Capital Partners, the company's indirect private equity sponsor, advised in March that it was unwilling to either invest capital into the business or purchase all or a portion of the lenders' security, ATB demanded repayment of the debt. PwC was appointed receiver. Counsel is McCarthy Tétrault for the applicant and Stikeman Elliott for the company.
Schendel Mechanical Contracting, an Edmonton, Alberta-based mechanical contractor, filed an NOI on March 22, listing $37.2MM in liabilities, including $18.1MM to ATB. The company has accused the provincial government of owing them $26.0MM for work done on the Grande Prairie Regional Hospital, a $760.0MM project that Schendel has been working on for almost 6 years and that has been plagued with problems. Grant Thornton is the proposal trustee.