CLM Distribution Pool & Spa Products and Lectranator Systems, Calgary, Alberta-based pool and spa products distributors, filed for bankruptcy on January 10, respectively listing $3.5 million and $925.1 thousand in liabilities. Grant Thornton is the bankruptcy trustee.
Gozco, a Calgary, Alberta-based investment firm, filed for bankruptcy in March 2018. PwC was appointed trustee. George Gosbee, who passed away in November 2017, was the company's sole director, officer, and shareholder. Karen Gosbee, his spouse, is the personal representative of Mr. Gosbee's estate. On January 7, PwC filed an application for an order declaring, amongst other things, that certain transactions granted by the company in favour of BNS (collectively, the "BNS Transaction") constitute a transfer at undervalue and are void as against the trustee. Bowfort, the company's primary creditor, had provided to the company a loan of USD $5.0 million secured by a promissory note dated January 2014. This loan was advanced to the company to assist in funding its USD $7.5 million investment in a US business venture. The company did not make any repayments of the loan to Bowfort other than certain baseline annual interest payments. On August 10, 2017, the Gosbees entered into a commitment letter with BNS to open a private and personal overdraft lending account. At their direction, the company completed a series of transfers whereby USD $750.0 thousand belonging to the company was transferred into this personal account, to the detriment of the company's creditors. At the time the BNS Transaction was completed, the company was insolvent. It is alleged that there was no valid business purpose for the company entering the BNS Transaction, and by doing so, it breached its obligation to Bowfort. PwC alleges that the BNS Transaction was intended to defraud, delay, or hinder the company's creditors. Bennett Jones is counsel to the applicant.
CMS Toys/Halloween Alley, an Edmonton, Alberta-based toy distributor and novelty retailer, filed an NOI on December 16, listing $8.1 million in liabilities. The Bowra Group is the proposal trustee.
Boulder Creek Golf Course and Silverwing Golf Course, two related golf courses near Calgary, Alberta, were placed in receivership on December 12 on application by BMO. PwC was appointed receiver. Counsel is Gowling WLG for the applicant and Torys for the receiver.
IEC Ltd., Audeamus Capital Corp. and certain other entities related to the Strategic Group, one of Calgary, Alberta's largest real estate companies, had their properties placed in interim receivership on application by a group of the companies' lenders. The companies obtained protection under the CCAA on December 10, attributing their financial difficulties to the extended slump in the Canadian energy market and its effect on the Calgary real estate market. The companies' request to be granted creditor protection past the initial 10-day stay was opposed by the applicants in part on the basis that they no longer had confidence in the management of the companies and wanted a receiver appointed to safely manage and preserve the properties, ensure rents are collected and not co-mingled amongst the various companies and ensure operational expenses are paid by the appropriate companies. Alvarez & Marsal was appointed interim receiver. Counsel is McCarthy Tétrault for the company, Dentons for the interim receiver, Norton Rose Fulbright for the CCAA monitor Hardie & Kelly, BLG for BMO and certain other lenders, Blakes for Sun Life, Cassels for MCAP and BDC, McMillan for RBC, McLennan Ross for CWB, Brownlee for Canada ICI and SBI Canada Bank, Lawson Lundell for Vancity Community Investment Bank and Centurion Mortgage Capital Corporation, Fasken for Fiera, Torys for Connect First Credit Union, Gowling WLG for CIBC, Stikeman Elliott for IMC and Computershare, Osler for TELUS Pension Master Trust, Bennett Jones for Trez Capital and Parlee McLaws for Equitable Life.
IEC Ltd., Audeamus Capital Corp. and certain other entities related to the Strategic Group, one of Calgary, Alberta's largest real estate companies, obtained protection under the CCAA on December 10. The company has attributed its financial difficulties to the extended slump in the Canadian energy market. Vacancy rates in commercial office space in Calgary have soared since 2015 due to companies ceasing operations, engaging in headcount reductions and undertaking cost cutting measures. These vacancies have been compounded in the last two years by a large amount of new office space being added to the Calgary market, as well as increases in the property taxes being charged by the city. To put things in perspective, Calgary's downtown office vacancy rate is estimated to be 24.6% vs. Toronto's 2.2%. These changing market conditions have reduced the company's revenues and materially reduced the market value of many of its rental assets. Believing that there is no macro-economic turnaround on the horizon, the company sought creditor protection and intends to restructure its rental portfolio. Hardie & Kelly is the monitor. Neil Narfason was appointed CRO. Counsel is McCarthy Tétrault for the company and Norton Rose Fulbright for the monitor.
Traverse Energy (TSX-V: TVL), a Calgary, Alberta-based oil and gas company, was placed in receivership on December 6 on application by ATB, owed approximately $6.5 million. In 2017, the company completed a new well at a cost of over $9.0 million. Since completion, however, the new well only produced minor recoveries of oil, and in June 2018 management completely wrote off the asset. This unsuccessful project contributed to an increasingly tight cash flow situation for the company, with restricted capital available for capital expenditures and revenues declining generally as a result of industry conditions. Starting in early 2019, the company attempted to sell its assets with the assistance of Sayer Energy Advisors and subsequently GMP First Energy, but these attempts were unsuccessful, and by November the company consented to the appointment of a receiver. EY is the receiver. Counsel is MLT Aikins for the applicant and McCarthy Tétrault for the receiver.
Ventures West Transport, a Sherwood Park, Alberta-based transportation company specializing in transportation across winter and ice roads in the western provinces, the Yukon and the Northwest Territories, obtained protection under the CCAA on November 29. The company is majority owned by the Tłı̨chǫ government, a First Nations organization that initially invested in the business in 2009. Since the acquisition, however, the Tłı̨chǫ government has had to advance approximately $37.6 million to support the company. The company's most significant contract has been to supply fuel to a mining operation in the Northwest Territories. Recently, the company was unsuccessful in its bid to re-win the contract for a further five-year term, and management projects that without this contract, the company's will report a loss of approximately $9.3 million for the year ending March 31, 2020. Not wanting to risk the destabilization of its other companies, the Tłı̨chǫ government has decided to cut its losses and wind-down the transportation business while under creditor protection. MNP is the monitor. Counsel is McMillan for the company, Cassels Brock for the monitor and Reynolds Mirth Richards & Farmer for CIBC, owed approximately $15.6 million.
Richard Pelletier Holdings, a holding company related to one of the sellers of Pacer Construction, was ordered bankrupt on November 26 on application by Pacer Construction Holdings, a holding company related to the purchaser of Pacer Construction. Pacer Construction was sold in 2014, with the sellers receiving approximately $135.3 million in cash. Following the closing of the sale transaction, it was alleged that Mr. Pelletier falsely represented the financial condition of Pacer. Mr. Pelletier denied the allegations and the matter went to arbitration. In 2019, an arbitral tribunal found the sellers liable to the purchaser for over $60.0 million plus interest and costs. The other sellers, excluding Mr. Pelletier and Richard Pelletier Holdings, have paid their portions of the awards. In July 2019, Mr Pelletier made a declaration that his holding company had no assets whatsoever. The applicant alleges that this is because a scheme was set out to divest the assets to related entities.The awards were converted into a judgment in August 2019 and the purchaser pursued a bankruptcy order on the basis that acts of bankruptcy were committed in the last six months. Grant Thornton is the bankruptcy trustee. JSS Barristers and MLT Aikins are counsel for the applicant.
Accel Canada, a Calgary, Alberta-based oil and gas company, obtained protection under the CCAA on November 22. The company had previously filed an NOI on October 21. PwC is the monitor. Counsel is Lawson Lundell for the company, BLG for the monitor, Bennett Jones for Third Eye Capital and Stikeman Elliott for Stream Asset Financial.