Fireweed Brewing Corp., a Kelowna, British Columbia-based privately-owned craft brewer with brands such as Tree Brewing, Dukes Cider, and Shaftebury, filed for bankruptcy on April 14, listing approximately $6.4 million in liabilities, including $3.4 million to Raw Energy Ltd. and $1.9 million to BMO. Deloitte is the bankruptcy trustee.
EncoreFX Inc., a Victoria, British Columbia-based financial services company providing foreign exchange risk management services and cross-border payment solutions, had its bankruptcy proceedings continued under the CCAA on March 30, 2021. Exactly one year earlier, on March 30, 2020, the company voluntarily assigned itself into bankruptcy as a result of atypical volatile foreign exchange market conditions driven mainly by the impact of the COVID-19 pandemic. Due to the extreme market volatility, several of the company's clients were OTM on their transactions. Under the terms of the company's standard ISDA agreements with its third-party banking counterparties (the "Liquidity Providers"), the company was required to pay significant additional margin to the Liquidity Providers to cover the value of the OTM contracts. The Plan of Compromise and Arrangement (the "Plan") entered into under the CCAA seeks to avoid the depletion of the company's assets resulting from extensive and uncertain litigation. The Plan aims to achieve this by providing a global resolution of certain claims against the company. The stakeholders with the largest claims filed against the company include Gustavson Capital Corporation, which filed a secured claim against the estate in the amount of $35.9 million, and Andreas Wrede, who filed a property claim for approximately $29.0 million. EY was appointed monitor. Counsel is MLT Aikins for the monitor, Jones Emery Hargreaves Swan for Gustavson Capital Corporation and Stikeman Elliott for Andreas Wrede.
Mamatas Real Estate Holdings Unlimited Liability Company, a Vancouver, British Columbia-based company that owns property at 3920 North Talbot Road and 5175 Ure Street, Tecumseh, Ontario (collectively, the "Real Property"), was placed in receivership on March 11 on application by BDC, owed approximately $4.8 million. Toolplas Systems Inc. ("TSI"), an affiliated company, operates from the Real Property pursuant to a lease with the company. In February, TD - a secured creditor of TSI - demanded repayment of certain indebtedness owing by TSI. In March, BDC issued a demand for payment from the company of its indebtedness. Fuller Landau was appointed receiver. Counsel is Chaitons for the applicant, Dickinson Wright for the company, and Miller Thomson for TD.
Ardenton Capital Corporation ("ACC"), a multinational private equity corporation that acquires stakes in mid-market private businesses — along with Ardenton Capital Bridging Inc., its wholly-owned subsidiary — filed for protection under the CCAA on March 5, listing approximately $354.6 million in collective liabilities. ACC attributes its financial difficulties to two major factors. First, the portfolio companies in which ACC has indirect majority ownership interests are not generating sufficient cash flow for ACC to meet all of its corporate overhead costs, pay interest on its debt, and acquire additional businesses. Second, there have been significant disruptions in the capital raising markets because of the COVID-19 pandemic. In April 2020, ACC began deferring payments on its preferred and hybrid security products in order to conserve cash at the portfolio company level. However, the deepening impact of the pandemic has derailed the companies' attempts to catch up on these deferred payments to its investors and lenders. Since September 2020, ACC has not made any payments to its debtholders. To reduce costs thus far, in addition to office closures, ACC has implemented significant cost reduction measures, including layoffs and reductions in payroll. During the course of these CCAA proceedings, the companies intend to pursue third-party interim financing and return to Court to seek approval of such financing. KSV Advisory was appointed monitor. Counsel is MLT Aikins and Aird & Berlis for the companies and DLA Piper for the monitor.
Bryn Gwyrdd Holdings Inc. ("BGHI") and Mynyddoedd Holdings Inc. ("MHI"), Vancouver, British Columbia-based companies, were placed in liquidation on March 4. In December 2017, David Standish and John Milsom of KPMG UK were appointed receivers over 27 companies, including BGHI and MHI which held properties in Canada. MNP was appointed liquidator. Farris is counsel to the applicants.
0932293 B.C. Ltd. (o/a CELLICON), an Abbottsford, British Columbia-based company that provides retail sales of wireless accessories, as well as phone repair services at mall-based kiosks and stores, was deemed to have filed an assignment in bankruptcy on March 2, listing approximately $362.0 thousand in assets and $1.8 million in liabilities. Most of CELLICON's locations are operated by independent operators under Management Services Agreements ("MSAs"). Like others in the retail sector, CELLICON's business was adversely impacted by the various restrictions and closures arising from the COVID-19 pandemic. More recently, CELLICON's cash flows were negatively impacted by certain operators' refusal or inability to pay the fees due under the MSAs. In response, on February 19, CELLICON filed an NOI with a view to stabilizing its business. After CELLICON realized it could not fund payment of its March 2021 rent, however, it chose not to file the cash flow projections required under the BIA, resulting in it being deemed to have filed an assignment in bankruptcy. Counsel to certain of the operators have indicated that the MSAs are not compliant with various franchise laws across Canada and, as such, have advised that the operators will have claims against CELLICON that would set off any amounts owed under the MSAs. MNP is the bankruptcy trustee.
Watershed Solutions Inc. (“WSI”), a British Columbia-based consulting firm, was placed in receivership on February 19 on application by Street Quality Entertainment Ltd. (“SQE”), owed approximately $5.9 million. Prior to COVID-19, WSI, which had offices in Victoria, Toronto, and New York, consisted of a co-working division and consulting division to its core business. However, the co-working division ceased operations prior to the receivership appointment due to various pandemic-related indoor working rules and protocols. Between 2015 and 2017, SQE made advances totaling $4.0 million to WSI under a loan agreement. Although SQE initially agreed to forbear on enforcement when the agreement came to term in 2018, it has recently concluded it is no longer prepared to continue to forbear on its enforcement and has demanded full repayment of WSI's indebtedness. However, WSI is unable to repay SQE as it is out of cash. It is the intention of the receiver to continue operations of the consulting division given that there are still existing contracts. SQE's hope is that the receiver will also run a SISP for WSI and that this process will generate some recovery under the loan agreement. Grant Thornton was appointed receiver. Counsel is DLA Piper for the applicant and Lawson Lundell for the receiver.
TGF Acquisition Parent Ltd., Sun Rich Fresh Foods Inc. and Tiffany Gate Foods Inc., British Columbia companies which are part of a larger group known as the Fresh Food Group (the "Group"), filed for protection under the CCAA on February 17, listing in excess of US$150,000,000 in liabilities, including US$119,000,000 to Cortland Capital Market Services LLC, as administrative agent to various lenders. The Group, which includes several US entities that filed for Chapter 11 protection on February 15, is a leading provider of branded and private-label offerings of fresh-cut fruits and vegetables, ready-to-go meals and meal kits, behind-the-glass salads, and other products. In 2019, the Group faced significant liquidity and other economic pressures, forcing it to implement certain strategic measures, including entering into an exchange transaction to restructure its indebtedness with its then existing lenders. Despite the exchange transaction, the Group has continued to face significant financial challenges in the context of its business operations, most recently due to economic pressures caused by the COVID-19 global pandemic. More specifically, in 2020, the demand for the Group’s largest product segments, fruits and vegetable trays, significantly declined as consumer habits began to change, and as the various federal, provincial and state governments in both Canada and in the US began imposing various sanitary measures and restrictions to prevent or limit the spread of the COVID-19 virus. These issues, combined with production and supply chain issues, have significantly affected the Group's liquidity position throughout 2020. EY was appointed monitor. Counsel is Stikeman Elliott for the companies and TGF for the Monitor.
Unique Restoration Ltd., which was engaged in the business of building maintenance and restoration services for multi-unit residential, commercial, and industrial projects primarily in British Columbia and Ontario, filed an NOI on January 4, listing approximately $10 million in liabilities, including a combined amount of approximately $5 million owing to RBC and VGNA Holdings Inc. The company's insolvency was caused in part by a prime contractor's failure to pay the company's invoices on a large renovation project, a stop work order issued by Worksafe BC on the project and litigation brought by the prime contractor against the company related to same. On January 28. the company filed materials in connection with a stay extension motion returnable February 3. However, on February 3, RBC sought and was granted an order appointing Fuller Landau as receiver. Counsel is Aird & Berlis for RBC and Minden Gross for the receiver. Counsel to the company in the NOI proceedings was Rory McGovern PC. Crowe Soberman was the proposal trustee.
EzTix Event Ticketing Inc., a Vancouver, British Columbia-based company that provides ticketing solutions to event organizers around the world, filed an NOI on November 30 and a proposal to its creditors on December 29. The company lists approximately $1.1 million in liabilities. McEown and Associates is the proposal trustee.