Leigh Commercial Builders, a Wetaskiwin, Alberta-based general contractor, was placed in receivership on June 15 on application by RBC. Grant Thornton was appointed receiver. MLT Aikins is counsel for the applicant.
Cequence Energy Ltd. (TSX:CQE), a Calgary, Alberta-based company engaged in the acquisition, exploration, development, and production of petroleum and natural gas reserves in Western Canada — along with its subsidiaries — obtained protection under the CCAA on June 11, listing approximately $112.7 million in liabilities. The companies, which reported operating losses for the last five years, have a working capital deficiency of $10.3 million and a secured term loan outstanding of $50.0 million. They are currently in the midst of a liquidity crisis, primarily due to low commodity prices, declining production volumes, onerous contractual obligations, and significant debt. As a result of these factors and based on current cash balances, the companies will be unable to fund their financial commitments in 2020 absent a restructuring of their affairs. During the CCAA proceedings, the companies will be seeking up to $7.0 million in DIP financing from its second lien lenders. EY was appointed monitor. Counsel is Norton Rose Fulbright for the companies, BDP Law for CIBC, BLG for the second lien lenders, and McCarthy Tétrault for EY.
Bow River Energy Ltd., a Calgary, Alberta-based junior oil and gas producer, filed for protection under the CCAA on June 1. The company has been impacted by the various industry challenges facing Western Canadian oil and natural gas markets, including a precipitous decline in oil and natural gas prices over the past five months. Although the company was able to successfully emerge out of the 2014 and 2018 economic downturns, the more dramatic downturn in the last several months has presented difficulties which the company has not been able to overcome. In April, Western Canadian Select oil prices declined 92% in comparison to the 2019 average prices. This decline in price proved disastrous for the company and it estimates a 350% drop in cash flow. In addition, the company's operations have been adversely impacted by social distancing measures. BDO was appointed monitor. Counsel is BLG for the company and Bennett Jones for the monitor.
Q'Max Solutions Inc., a Calgary, Alberta-based oilfield services provider, along with its affiliates (collectively, the "Q'Max Group"), were placed in receivership on May 28 on application by HSBC Canada, as administrative agent for a syndicate of lenders (the "Agent"), owed approximately $145.4 million (USD) and $1.2 million (CAD). The syndicate is currently comprised of HSBC, BMO, BDC, Export Development Canada, and HSBC USA. In recent months, the business of the Q'Max Group has been negatively impacted by depressed oil and natural gas pricing and a corresponding reduction in rig and drilling activity. Such negative impacts were exacerbated by public health restrictions in response to COVID-19. KPMG was appointed receiver. Norton Rose Fulbright is counsel to the Agent.
Destiny Bioscience Global Corp., a Nisku, Alberta-based cannabis genetics and tissue culture research and development company — along with its subsidiaries — were placed in receivership on May 22 on application by Synergy Projects (Destiny) Ltd. and Synergy Projects Ltd. The Bowra Group was appointed receiver. DLA Piper is counsel to the companies.
ENTREC, an Acheson, Alberta-based heavy haul transportation and crane solutions provider, obtained production under the CCAA on May 15. Operating from 11 locations across Canada and the US, the company began facing challenges in 2019 due to a number of negative macro-economic factors, including pipeline constraints, discounts in the market price for oil produced in western Canada, rising carbon taxes and increased regulatory requirements. The recent COVID-19 global pandemic, a historic decrease in oil demand and the Russian-OPEC oil price war have also contributed to the company's challenges. Despite efforts to restructure its balance sheet, the company remains in default on its lending facilities. On May 14, Wells Fargo, as agent for the syndicate, issued demands for the approximately CAD $72.3 million and US $12.7 million owing to the syndicate, prompting the company to seek creditor protection. While under creditor protection, the company will explore a Court supervised formal sale and investment solicitation process or plan of arrangement. Alvarez & Marsal was appointed monitor. PwC is financial advisor for the lending syndicate. Canadian counsel is Miller Thomson for the company, Norton Rose Fulbright for the monitor, Bennett Jones for the lending syndicate, Ogilvie for the directors and officers and McLennan Ross for CWB,
Redrock Camps Inc., a Calgary, Alberta-based company that provides temporary accommodation sites for companies in the energy, infrastructure, and firefighting sectors to house employees working in rural locations — along with its subsidiaries — obtained protection under the CCAA on May 13 on application by Invico Diversified Income LP ("IDILP") and Invico Trade Capital LP, owed approximately $18.9 million. The company, which lists over $26.7 million in total liabilities, is currently facing a liquidity shortfall and has defaulted on its obligations to the applicants, other creditors, and several of its suppliers. Most concerning, Skinner Bros Transport Ltd., the transportation company responsible for food delivery to the service camps, has threatened to cease transporting food to the camps until it receives payment. Without CCAA protection, a shutdown of operations is inevitable. IDILP will be providing up to $2.5 million in interim financing during these CCAA proceedings. BDO was appointed monitor. Counsel is Gowling WLG for the applicants, MLT Aikins for the monitor, and Osler for the companies.
Avenir Sports Entertainment Ltd., the owner of the Western Hockey League's Portland Winterhawks, along with Audible Capital Corp., Avenir Trading Corp, and 1892244 Alberta Ltd. (collectively, the "Debtors"), was placed in receivership on May 7 on application by Bridging Finance, as Agent, owed over $20.5 million. After the Debtors failed to meet payment deadlines to the Agent, the Agent took control of the Portland Winterhawks, which had been put up as collateral when team owner Bill Gallacher took out a loan with the Agent. The Debtors and the Agent also agreed that Audible was to complete a sale of the shares in Swiss Entertainment Company, the owner of Lausanne Hockey Club, by November 2019 and pay approximately $5.0 million to the Agent. However, Audible failed to complete this sale as well as a sale of the Portland Winterhawks in order to repay the Debtors' indebtedness to the Agent. KSV Advisory was appointed receiver. Counsel is Bennett Jones for the receiver, Chaitons for the applicant, and Burnet, Duckworth & Palmer for the Debtors.
JMB Crushing Systems Inc., a Bonnyville, Alberta-based producer and supplier of aggregates for leading oil field companies, industrial projects and road construction throughout Alberta, along with its holding company, obtained protection under the CCAA on May 1. In 2019, the company encountered issues meeting the cash flow projections delivered to its lenders due to several unforeseen events. These included, among other things, forest fires that delayed completion of a $10.0 million project by more than two months, as well as an uncharacteristically wet summer which led to a 6-month delay of another $10.0 million project that the company had secured. The current pandemic, along with the state of emergency declared by the government of Alberta in March, has complicated the company's ongoing restructuring plans. Since early March, the availability of capital from investors and lenders has dropped precipitously and the pace of business across North America has significantly slowed or in some cases ceased altogether. ATB Financial has agreed to provide up to $900.0 thousand in DIP financing. Counsel is Gowling WLG for the companies, McCarthy Tétrault for the monitor, and Dentons for ATB Financial.
Dominion Diamond Mines, a Calgary, Alberta-based diamond mining company with ownership interests in two large diamond mines in the Northwest Territories, filed for protection under the CCAA on April 22, listing approximately $70.2 million (USD) and $110.9 million (CAD) in liabilities. The company has historically supplied rough diamonds to the global market through its sorting operations in India and a sales centre in Belgium. It has been one of Canada’s largest independent diamond producers and one of the largest private employers in the Northwest Territories. The global COVID-19 shutdown of commercial trade and travel in March has effectively frozen the company's ability to move its rough diamond inventory, worth nearly $200.0 million, from the two mines to the company's sorting facilities in India for further movement for eventual sale on the world market. The company's inability to generate revenues from ordinary course sales of diamond inventory has resulted in an urgent liquidity crisis and the company is unable to meet its obligations as they generally become due. FTI is the monitor. Counsel is Blakes for the company, Bennett Jones for the monitor, and Cassels for the Government of the Northwest Territories.