Centre City Real Estate Inc. (o/a Re/Max Centre City Realty Inc.) ("Centre City"), a Re/Max franchisee operating in Prince George, BC, and It'll Be Good Hold Co Inc., a holding company, were placed in receivership on October 30 on application by TD, owed approximately $1.2 million. TD, which has only received one payment against the companies' indebtedness since January 2020, entered into a forbearance agreement under which the companies agreed to repay their indebtedness before June. However, the companies failed to do so and consequently defaulted under the forbearance agreement. Furthermore, the companies could not secure any refinancing or investment during the forbearance period and have similarly been unable to do so since the expiry of its term. In October, Centre City's landlord issued a notice of termination of their lease and claimed for the arrears and the present value of all future rent payments over the unexpired portion of the term. MNP was appointed receiver. Owen Bird is counsel to the applicant.
Dubh Linn Gate Partners (Vancouver) Company, a Vancouver, British Columbia-based company that owns a popular pub, filed for bankruptcy on October 20, listing approximately $1.7 million in assets and $2.6 million in liabilities. EY is the bankruptcy trustee
Sunniva Inc. (CNE: SNN), a Vancouver, British Columbia-based development stage business that has been developing facilities for the cultivation, processing, and distribution of raw cannabis flower and cannabis-based products — along with its subsidiaries — obtained protection under the CCAA on October 9. The company's financial distress is caused primarily by cost overruns and construction delays regarding its primary business asset, a leasehold interest in an under-construction cannabis cultivation facility in California. In November 2018, the company announced its strategic decision to focus corporate resources on developing the company's business in California and began liquidating its Canadian assets. The company and its subsidiaries intend to liquidate what remains of their Canadian assets and advance the business in California. On June 22, the British Columbia Securities Commission and Ontario Securities Commission each issued a cease trade order in respect of the company's shares. The company, which has unsecured debts in excess of $58.0 million, is currently seeking an extension of the stay period so that the relief will continue until November 27. Alvarez & Marsal was appointed monitor. Counsel is BLG for the companies and Cassels Brock for the monitor.
Konnect Brookside Villas Limited Partnership and Konnect Brookside Holdings Ltd., developers involved in the development and construction of a three-phase 69 unit townhome project on leased property located within the self-governed lands of the Westbank First Nation, were placed in receivership on October 6 on application by Canadian Western Bank ("CWB"), owed approximately $9.3 million. CWB had provided the companies with a construction mortgage facility for financing Phase 1 of the project, consisting of 23 townhomes. However, the construction project — which began in 2018 — has been plagued by a host of problems, including being behind schedule, cost overruns, builders' liens being registered against the property, and a dispute between the developer and its general contractor. Although the companies are unable to meet the requirements and payments of the loan, CWB is still willing to fund the completion of Phase 1 of the project. Grant Thornton was appointed receiver. Counsel is Owen Bird Law for the applicant and Fasken for the receiver.
Creditloans Canada Financing Inc. (o/a "Progressa") and Creditloans Canada Capital Inc. (“Capital Inc.”) obtained protection under the CCAA on September 30, listing approximately $67.0 million in liabilities and $47.0 million in assets. Progressa is a Vancouver, British Columbia-based company primarily engaged in servicing consumer loans through an online medium to individuals unable to secure loans from traditional sources. Capital Inc. — which has no active business or operations — was incorporated for the sole purpose of issuing bonds, the proceeds of which are advanced to Progressa. As a result of the COVID-19 pandemic, Progressa experienced a significant reduction in originations of new loans that severely impacted its cash flow. The companies have sought a stay of proceedings under the CCAA in order to obtain interim financing and continue lending operations while working with its stakeholders to formulate a restructuring plan that will maximize asset value. During these CCAA proceedings, the companies will be receiving up to $2.5 million in DIP financing. BDO was appointed monitor. Counsel is McMillan for the companies, Fasken for the monitor, and Blakes for the proposed DIP lender.
Mountain Equipment Co-operative (MEC), a Vancouver, British Columbia-based member-owned and directed retail consumer co-operative specializing in outdoor activity equipment and clothing, obtained protection under the CCAA on September 14, listing approximately $229.6 million in liabilities and $389.0 million in assets. MEC — which is a key Canadian retail partner with global outdoor brands including Patagonia, the North Face, Arc'teryx, Birkenstock, and Blundstone — currently operates 22 retail locations across Canada. While there was a considerable increase in online sales during March to September, MEC experienced a reduction in sales of $90 million compared to last year, and all MEC stores were closed as of March. The co-op is currently in the midst of a liquidity crisis, primarily due to difficult retail conditions which were exacerbated by the COVID-19 pandemic. As such, it was necessary for MEC to refinance, downsize operations, conduct a review of strategic alternatives, or conduct a potential sale of the MEC business. MEC's board of directors has unanimously approved a deal in which Kingswood Capital Management ("Kingswood"), a Los Angeles-based private investment firm, will acquire MEC's assets. MEC's transition from a co-operative structure to a subsidiary of Kingswood is required to ensure a stable future for the business. Alvarez & Marsal was appointed monitor. Counsel is Norton Rose Fulbright for MEC, Cassels Brock for the monitor, and Fasken for Kingswood.
Urthecast Corp. (TSX:UR), a Vancouver, British Columbia-based Big Data services company specializing in satellite imaging, data services, and geo-analytics, obtained protection under the CCAA on September 4, listing approximately $151.3 million in liabilities and $126.6 million in assets. The company is well-known for operating two cameras on the Russian segment of the International Space Station. Historically, the company has been able to manage its required ongoing financing by obtaining secured bridge financing from its current group of secured creditors. Lately, however, the company has needed extensive funding to execute on projects still in development. In addition, the company's regular financing requirements have been negatively impacted by the COVID-19 pandemic, which has affected sales, the collection of receivables, and delayed the company in achieving payment milestones in connection with engineering and services contracts. EY was appointed monitor. Bennett Jones is counsel to the company.
Ronsons Shoe Stores Inc., a comfort shoe retailer and manufacturer with multiple locations throughout the lower mainland of British Columbia, was adjudged bankrupt on September 4, listing approximately $3.4 million in liabilities, including approximately $989,000 to TD. The company was previously placed in receivership on application by TD. In recent years, the company has seen a decrease in revenues and its cash-flow issues were further affected by the pandemic-related closure of physical storefronts. MNP is the bankruptcy trustee.
TA Hotel Management Limited Partnership, which owns Vancouver's Trump International Hotel, filed for bankruptcy on August 17, listing approximately $4.9 million in liabilities, including $3.2 million to Maxfine International Limited. Grant Thornton is the bankruptcy trustee.
Vert Infrastructure Ltd. (CSE:VVV), a holding company which provides funding, infrastructure, and branding to affiliated licenced cannabis and hemp growers and extractors in the US, was placed in receivership on June 16 on application by KW Capital Partners Limited, owed approximately $5.2 million as the agent on behalf of the company's secured lenders. It is alleged that the company transferred money to its most significant subsidiary, Elite Ventures Group LLP, for the purposes of developing certain real property interests in Nevada, US. Currently, the applicant is seeking the appointment of a receiver to investigate whether the transfer of funds from Elite to other parties for no consideration constitutes a transaction at undervalue. The company's most recent interim financial statements indicate that it has a cash balance of under $2,000 and a shareholders' deficit of more than $22.0 million. KSV Advisory was appointed receiver. Garfinkle Biderman is counsel to the applicant.