True Leaf Brands

True Leaf Brands, a Vernon, British Columbia-based manufacturer and distributor of hemp-based nutrition for pets, filed an NOI on April 2. Founded in 2013, the company had also recently secured three licenses from Health Canada to cultivate, process and sell medical cannabis. The NOI filing follows a default notice the company received on March 23 from Lind Asset Management XV LLC, the firm managing its convertible security funding agreement. FTI is the proposal trustee. Counsel is Clark Wilson for the company and Stikeman Elliott for the secured lender.

EncoreFX

EncoreFX, a Victoria, British Columbia-based foreign exchange firm, filed for bankruptcy on March 30. After suspending its trading activities, the company advised clients that the restructuring had become necessary as a number of customers to whom the company granted credit defaulted on their obligations to the company because of the rapid changes in the FX market caused by COVID-19. Most of the company’s clients were importers and exporters doing $10.0 million to $50.0 million in FX transactions a year. EY is the bankruptcy trustee.

Kahunaverse Sports Group

Kahunaverse Sports Group, a Surrey, British Columbia-based retailer of multi-brand sporting equipment, apparel and accessories, and its subsidiary, Soccer Express Trading, filed NOIs on March 11. In recent years, the companies had been experiencing financial losses and challenges in its operations due to poor retail results and mergers of their corporate operations. Furthermore, the companies were compelled to close six of their retail stores as part of the effort to support social distancing. Prior to the NOI filings, the companies and their shareholders entered into a share purchase agreement with Greyrock Capital on the condition that the current debts be compromised. Greyrock Capital also agreed to provide interim financing to the companies to fund much needed working capital as the spring period is one of the busiest seasons of the year for sales. On March 30, the court granted orders approving the interim financing and extending the period in which the companies must file a proposal. PwC is the proposal trustee.

FHC Enterprises

FHC Enterprises, a Vancouver, British Columbia-based company which operates the FIELDS chain of 64 retail stores located in rural communities throughout Western Canada, filed an NOI on March 6, listing $17.5 million in liabilities, including $8.9 million to RBC. The company attributes its financial difficulties to a failure to respond quickly to increasing minimum wage costs and increased carbon taxes. In addition, several of the company's stores have been affected by the downturn in retail and the economies in Alberta and Saskatchewan. MNP is the proposal trustee. Counsel is MLT Aikins for RBC and Gehlen Dabbs for the company.

Invictus MD Strategies (TSX-V: GENE)

Invictus MD Strategies (TSX-V: GENE), a Vancouver, British Columbia-based cannabis company, along with certain other related companies, obtained protection under the CCAA on February 13. Several factors contributed to the company's liquidity issues. First, it was unsuccessful in obtaining additional financing to complete a custom-built cultivation facility. Second, the strains of cannabis that are currently being harvested by Acreage - the company's primary operating entity - are not in demand as they do not have sufficient potency. While Acreage is currently in the process of changing over its plants to those with a higher level of potency, these plants will not be ready to harvest until mid-April 2020. Finally, the company's revenues have decreased due, in part, to lower consumer demand and market saturation. The company currently owes approximately $10.6 million to ATB Financial and $5.3 million to Authentic Brands, a New York-based brand management company. PwC was appointed monitor. Counsel is Cassels for the company, BLG for the monitor and Blakes for ATB.

1034179 B.C. Ltd.

1034179 B.C. Ltd., a British Columbia-based developer of a 66-unit rental property in Maple Ridge, British Columbia, obtained protection under the CCAA on February 4, listing approximately $22.0 million in liabilities, including $6.3 million to Canadian Western Bank. In April 2017, the company purchased the Maple Ridge property and began development with $3.8 million of purchase financing from its subordinate lenders. It was contemplated that construction would finish at the end of June 2018. By the fall of 2017, however, the company realized that construction was taking longer and costing more than initially anticipated. In the beginning of 2018, the company managed to secure an additional loan from its subordinate lenders as well as from CWB in order to complete construction of the property. Shortly after these financings, it became clear that the company could not complete construction or meet the monthly interest payments under its loan agreement with the subordinate lenders. In September 2019, CWB ceased to advance funds to the company and demanded payment for $6.3 million. The company proposed to CWB that it would seek relief under the CCAA so that interim financing could be obtained to complete construction of the development for the benefit of all stakeholders. The Bowra Group was appointed monitor. Fasken is counsel to the company.

Grabhers Last Stand Bison Ranch

Grabhers Last Stand Bison Ranch, a Dawson Creek, British Columbia-based bison ranch, was placed in receivership on February 3 on application by the Bank of Nova Scotia, owed approximately $6.6 million. After the corporation defaulted under its loan agreements with BNS, BNS made demands for repayment of amounts owed under these agreements. To date, the corporation has failed to make any payments. BNS further alleges that the corporation withheld relevant information when applying for credit, and that the corporation engaged in uncooperative and potentially fraudulent conduct. For example, while the corporation's profit and loss statement for January - September 2019 indicates revenue generated of approximately $1.8 million, this amount was not deposited into the corporation's account with BNS. Furthermore, the corporation sold 430 heads of bison to a related corporation without informing BNS or receiving its consent for the transfer of assets. Deloitte was appointed receiver. MLT Aikins is counsel to the applicant.

Novelion Therapeutics (NASDAQ:NVLN)

Novelion Therapeutics (NASDAQ:NVLN), a Vancouver, British Columbia-based biopharmaceutical company dedicated to developing and commercializing new treatments for rare diseases, commenced implementation of a shareholder-approved plan of liquidation on January 16. The company owns a minority equity interest in Amryt Pharma, a Dublin, Ireland-based biopharmaceutical company ("Amryt Equity"). Since the Amryt Equity is the company's primary remaining material asset, the company expects that any value available to its shareholders will consist almost entirely of the Amryt Equity or the net proceeds. Alvarez & Marsal was appointed liquidator. Counsel is Norton Rose Fulbright for the company and Fasken for the liquidator.

Quest University Canada

Quest University Canada, a Squamish, British Columbia-based private, not-for-profit post-secondary institution, filed for protection under the CCAA on January 16, listing approximately $47.5 million in liabilities, including $16.0 million to Vanchorverve Foundation. Since the university commenced operations in 2007, it has not generated sufficient revenue to cover operating costs and the carrying costs associated with legacy debts incurred in its start-up. As such, the university requires CCAA protection to provide students with the opportunity to complete the academic year, while creating economic stability for the university's coming years. On January 27, the court approved the university's request for an extension of the stay of proceedings to May 29. The university also secured a $5.0 million loan from RCM Capital Management. Vanchorverve, the university's largest secured lender, had wanted the university to obtain the $5.0 million loan from Burley Capital and had unsuccessfully requested that the court replace four of the university's board members with appointees chosen by Vanchorverve. PwC, which was appointed monitor, advised that given the history between Vanchorverve's manager, Blake Bromley, and the university, interim financing should be provided by a third party lender. Counsel is Dentons for the university, McMillan for the monitor, and Murphy & Company and McCarthy Tétrault for Vanchorverve.

DGSTS Services Group

DGSTS Services Group, formally known as DGSTS Group, a British Columbia-based international engineering services company, was placed in receivership on December 20 on application by RBC, owed approximately $419.1 thousand. RBC also received judgment against the company’s guarantor, DGS Technical Services. RBC had granted the company certain credit facilities under a loan agreement. As security for this agreement, the company provided a general security agreement and two mortgages registered on title to commercial property it owned in Ottawa, Ontario. The company failed to fulfill its financial obligations to RBC under the loan agreement, and the guarantor did not make payment on account of its guarantee to RBC. Following service of the Application Record, counsel for the company advised RBC that refinancing would be available within a week. However, as of December 17, RBC has yet to receive a term sheet with proof of financing or any evidence of viable refinancing. Grant Thornton was appointed receiver. Counsel is Lerners for the applicant and Pelech, Otto, Powell & Ketsetzis for the company.