The Bridal House

The Bridal House, an Edmonton, Alberta-based bridal boutique, filed an assignment in bankruptcy on September 10. In a message on its website, the company, which had served Edmonton area brides for 27 years, cited the onset of the COVID-19 pandemic, the shutdown of non-essential businesses and limited retail capacity as the reasons for its filing. Faber is the bankruptcy trustee.

2127712 Alberta Ltd.

2127712 Alberta Ltd., a Cochrane, Alberta-based company, was placed in receivership on August 20 on application by Roynat Inc., owed approximately $2.4 million pursuant to a loan agreement wherein Roynat Inc. agreed to loan $2.6 million to the company for, among other things, the purchase of 590 Griffin Road East, Cochrane, Alberta. The company committed various events of default under the loan agreement. In June, Roynat Inc. made demand of the company for immediate payment in full of the indebtedness, which currently remains unpaid. MNP was appointed receiver. McMillan is counsel to Roynat Inc.

Cococo Chocolatiers Inc.

Cococo Chocolatiers Inc., a Calgary, Alberta-based manufacturer and retailer of artisanal chocolates, was placed in receivership on August 18 on application by Panterra Mortgage & Financial Corporation ("Panterra"), owed approximately $10.7 million. Despite Panterra's demand for repayment, the company has not paid and continues to fail to pay its indebtedness. The court also approved a sales process for the company's assets and approved Panterra's credit bid, which will serve as a stalking horse bid in the sales process. Deloitte was appointed receiver. Counsel is Dentons for Panterra and Torys for the receiver.

Abbey Resources Corp.

Abbey Resources Corp., a Calgary, Alberta-based owner and operator of over 2,000 shallow gas wells in Swift Current, Saskatchewan, obtained protection under the CCAA on August 13, listing approximately $15.3 million in liabilities, including $5.2 million for municipal taxes, $6.5 million owed to surface rights holders, and $1.6 million owed under leases with mineral rights holders. Since the company acquired the wells via three transactions in 2016 and 2017, the price the company has been able to sell its production from those wells has not been sufficient to pay its debts. While the company has been able to cover its day-to-day operating costs, it cannot consistently pay land taxes to the municipalities and one First Nation where the wells are located. Opponents to the CCAA application alleged, among other things, that the company was not acting in good faith. In particular, they suggested that the company knew from the outset that the operations it established in the three asset acquisitions would not generate sufficient cash flow to pay its debts as they become due. Moreover, the opponents stated that they have lost confidence in the company's management. Despite strong opposition by the regulator, the Saskatchewan Minister of Energy (the "Minister"), the court also approved the inclusion of a provision in the initial order staying administrative action by the Minister for the company's failure to pay certain funds. MNP was appointed monitor. Counsel is DLA Piper for the company, McDougall Gauley for the monitor, Robertson Stromberg for the Minister, Miller Thomson for the Rural Municipality of Lacadena No. 28, Kanuka Thuringer for the Rural Municipality of Miry Creek No. 229 and MLT Aikins for Carry the Kettle Nakoda Nation Band No. 76.

Shamrock Valley Enterprises Ltd. (“Shamrock”)

Shamrock Valley Enterprises Ltd. (“Shamrock”), an Elk Point, Alberta-based provider of services in the form of general earthworks, oil and gas infrastructure, grading, road building, and fluid hauling, had a receiver appointed over its assets on application by Canadian Western Bank, owed approximately $3.9 million. The Receivership Order was granted on July 30, but stayed by the Court of Queen’s Bench of Alberta until August 27, 2021, when a further Order was granted lifting the stay. The Bowra Group Inc. was appointed receiver. Counsel is McLellan Ross for Canadian Western Bank.

North American Steel Erectors Inc.

North American Steel Erectors Inc., a Cochrane, Alberta-based company that provides steel erector contracting and other services to large construction projects, was placed in bankruptcy on July 29 on application by BNS, owed approximately $1.8 million. The company also owes $2.4 million to Roynat Inc. and $1.2 million to the CRA. At the time of the bankruptcy, the company had three open contracts - one in Alberta and two in Ontario. It attributes its financial difficulties to a project for the supply of steel on a 9th Avenue bridge project in Calgary which is currently the subject of litigation. MNP is the bankruptcy trustee and has determined that there is no economic benefit to complete any of the three open contracts. Counsel is McMillan for BNS, Ramsay Legal Counsel for the company, Thompson Dorman Sweatman for Exact Detailing Ltd and Caron & Partners for the bankruptcy trustee.

Kate Energy Holdings Inc.

Kate Energy Holdings Inc., a Calgary, Alberta-based power producer, was placed in receivership on July 13 on application by Campus Energy Partners LP ("Campus"), owed approximately $10.8 million. In 2019, the company and Campus entered into 1) an LNG Supply Agreement whereby the company agreed to purchase liquified natural gas from Campus, and 2) an equipment lease agreement whereby the company agreed to lease a trailer from Campus. However, the company failed to comply with the express terms of the supply agreement and equipment lease agreement when it did not make payments to Campus when due. Hudson & Company (GRIP) Insolvency Trustees was appointed receiver. Counsel is Torys for Campus and Dentons for the receiver.

Alaska – Alberta Railway Development Corporation (“A2A Rail”)

Alaska - Alberta Railway Development Corporation ("A2A Rail"), which intended to build a new railway connecting northern Alberta to Alaska, was placed in interim receivership on July 12 on application by PwC, in its capacity as receiver of A2A Rail's main lender Bridging Finance. A2A Rail, along with two related numbered companies and shareholder Sean Frederick McCoshen, had previously filed NOIs on June 18 after PwC issued demands for the repayment of the approximately $212.9 million owed to Bridging. PwC has advised that it will not support any proposal put forward by the debtors and, given its concerns with respect to the improper use of advances under the loan, wants the assets of the debtors to be placed under the care and control of a court officer. MNP was appointed interim receiver of A2A Rail and bankruptcy trustee of the numbered companies, which, along with McCoshen, were deemed bankrupt on July 12 (Editor's note: last week we mistakenly wrote that A2A Rail was also deemed bankrupt - it was not, but rather had its proposal proceedings extended). Farber is the trustee of McCoshen's bankrupt estate. Counsel is TGF and McLennan Ross for PwC, Lawson Lundell for MNP and MLT Aikins for Farber.

Alaska – Alberta Railway Development Corporation (“A2A Rail”), 7198362 Manitoba Ltd. and 12703131 Canada Ltd.

Alaska - Alberta Railway Development Corporation ("A2A Rail"), which intended to build a new railway connecting northern Alberta to Alaska, was placed in interim receivership on July 12 on application by PwC, in its capacity as receiver of A2A Rail's main lender Bridging Finance. A2A Rail, along with two related numbered companies and shareholder Sean Frederick McCoshen, had previously filed NOIs on June 18 after PwC issued demands for the repayment of the approximately $212.9 million owed to Bridging. PwC has advised that it will not support any proposal put forward by the debtors and, given its concerns with respect to the improper use of advances under the loan, wants the assets of the debtors to be placed under the care and control of a court officer. MNP was appointed interim receiver of A2A Rail and bankruptcy trustee of the numbered companies, which, along with McCoshen, were deemed bankrupt on July 12. Farber is the trustee of McCoshen's bankrupt estate. Counsel is TGF and McLennan Ross for PwC, Lawson Lundell for MNP and MLT Aikins for Farber.

International Fitness Holdings Inc., International Fitness Holdings LP, and World Health North LP

International Fitness Holdings Inc., International Fitness Holdings LP, and World Health North LP, which operated 21 fitness clubs and CrossFit studios in Calgary and Edmonton, were deemed bankrupt on July 8. The companies had previously filed NOIs to, among other things, effect the sale of their assets to Ayrfit West Inc. and certain related parties, as purchasers, following a strategic process run by MNP. The sale closed on June 18 and the companies were deemed bankrupt on July 8 after the extension period expired and no proposal was filed. KPMG is the bankruptcy trustee. Counsel is Osler for KPMG and BLG for the purchaser.