Edward Collins Contracting Ltd. and various related entities (collectively, "ECC"), a group of companies operating in the heavy civil construction industry across Newfoundland and Labrador, obtained CCAA protection on October 5. ECC is a family-owned business that was created in 1974, having passed from the original owner, to son, to grandson. The primary causes of ECC's insolvency included, among other things: (1) ECC acquired a used asphalt plant from Texas that it had transported to Newfoundland and Labrador that it was ultimately not able to get running, resulting in losses of approximately $2 million; (2) ECC entered into an unfavourable bridge contract in 2019 which was supposed to be done over a 4-month period but rolled into 2020 and 2021, resulting in losses of over $1 million; (3) ECC accrued significant sourced deduction and HST arrears owed to CRA through 2019 to 2021; and (4) ECC's forbearance with RBC has expired and RBC has issued a demand on its $950,000 line of credit. Grant Thornton was appointed monitor. Counsel is O'Keefe & Company for ECC. By Dina Milivojevic
The Roman Catholic Episcopal Corporation of St. John's, the legal entity of the Archdiocese of St. John’s, Newfoundland, had its NOI proceedings continued under the CCAA on May 17. The limitations of the NOI proceedings, specifically the timeline limits for filing a proposal, made it necessary to initiate the CCAA proceedings to avoid disrupting, among other things, the sale process approved as part of the NOI proceedings, various other realization and recovery efforts, and the finalization of a settlement agreement with respect to the St. Kevin’s Parish Investment Funds. EY was appointed monitor. Counsel is McInnes Cooper for the Corporation; Gowlings and Budden & Associates as Representative Counsel for the Claimants, Stewart McKelvey for EY as monitor; and Cox & Palmer for the Government of Newfoundland and Labrador. By Dina Milivojevic
Canada Fluorspar (NL) Inc., which operated a fluorspar mine in St. Lawrence, Newfoundland and Labrador, had a receiver appointed over certain receivables and financed receivables on March 25, on application by HSBC Bank Canada, owed approximately USD$12 million, plus fees and interest. The company was previously placed in interim receivership and then CCAA protection on application by PwC as the receiver of Bridging Finance Inc. The financed receivables were carved out of the interim receivership/CCAA proceedings. The company and certain affiliates remain under CCAA protection notwithstanding the receivership order. Deloitte was appointed receiver. Counsel is Dentons for HSBC Bank Canada, Cox & Palmer for the company, McInnes Cooper for Grant Thornton as monitor and Stewart McKelvey for PwC as the receiver of Bridging Finance Inc. By Dina Milivojevic
Canada Fluorspar (NL) Inc. and Canada Fluorspar Inc. (collectively, "CFI"), which operated a fluorspar mine in St. Lawrence, Newfoundland and Labrador, obtained an initial order under the CCAA on March 11, on application by Grant Thornton, CFI's interim receiver. CFI was placed in interim receivership on February 21 (see our summary HERE), on application by PwC as the receiver of Bridging Finance Inc. and certain related entities (collectively, “Bridging”), which provided a $55 million loan to CFI. The purpose of the interim receivership was to preserve CFI’s operations while CFI’s stakeholders pursued options to restructure CFI and avoid bankruptcy. The initial order under the CCAA was granted on March 11, and a SISP was approved in connection with the comeback hearing on March 18. Grant Thornton was appointed monitor. Counsel is Stewart McKelvey for PwC as the receiver of Bridging, Cox & Palmer for CFI, McInnes Cooper for Grant Thornton as interim receiver / monitor, Dentons for HSBC Bank Canada and Goodmans for Golden Gate Capital. By Dina Milivojevic
Canada Fluorspar (NL) Inc. and Canada Fluorspar Inc. (collectively, “CFI”), which operated a fluorspar mine in St. Lawrence, Newfoundland and Labrador, were placed into interim receivership on February 21, on application by PwC as the receiver of Bridging Finance Inc. and certain related entities (collectively, “Bridging”). In the past several months, financial and logistical problems have hampered CFI’s operations, and it continues to generate negative cash flow. CFI’s current secured facilities include a $55 million CAD term facility with Bridging, facilities with HSBC that include a revolving term and overdraft account totalling $22 million USD, as well as a letter of credit and credit card facility totalling $1.6 million CAD. In addition, the Province of Newfoundland and Labrador as represented by the Minister of Tourism, Culture, Industry and Innovation provided a loan in the principal amount of $17 million CAD. CFI’s shareholder, Golden Gate Capital, has invested approximately $238 million USD in equity financing since its acquisition of CFI in 2014. Grant Thornton was appointed interim receiver to preserve CFI’s operations and maintain its property while CFI’s stakeholders pursue options to restructure CFI and avoid bankruptcy. Counsel is Stewart McKelvey for PwC as the receiver of Bridging, Cox & Palmer for CFI, McInnes Cooper for Grant Thornton as interim receiver, Dentons for HSBC Bank Canada and Goodmans for Golden Gate Capital. By Dina Milivojevic
The Roman Catholic Episcopal Corporation of St. John's (the "Episcopal Corporation"), the legal entity of the Archdiocese of St. John’s, Newfoundland, filed an NOI on December 21, listing $2.94 million in liabilities. In July 2020, the Newfoundland and Labrador Court of Appeal found that the Episcopal Corporation was liable for sexual abuse committed by the Christian Brothers at Mount Cashel Orphanage in the 1950s. The case featured four victims who served as test cases for about 60 cases in total. The Supreme Court denied leave in January 2021. EY is the proposal trustee.
DH Group Inc., which was operating as a Montana's BBQ and Bar in St. John, NL, was adjudged bankrupt on April 30 upon the application of Recipe Unlimited Corporation, owed approximately $257.8 thousand. The company also owes approximately $869.7 thousand to CIBC and $154.3 thousand to CRA. Deloitte is the bankruptcy trustee. Cox & Palmer is counsel to the applicant.
Fitz's Mobile Welding Inc., a Harbour Grace, Newfoundland and Labrador-based company that provides welding and fabrication services, was deemed bankrupt on July 15 after creditors rejected its proposal. The company listed approximately $2.5 million in liabilities, including $230.4 thousand to CRA.
Norcon, a Clarenville, Newfoundland and Labrador-based marine transportation company that operates passenger/freight and cargo ships, was deemed bankrupt on December 25. The company, which owes BDC over $1.4 million, has been negatively affected by the loss of government contracts of ferry services, the general downturn in the aquaculture business, and the need to write off a large debt from a related company. The company had previously filed an NOI on November 25 and subsequently attempted to transition its proposal proceedings into CCAA proceedings but was unsuccessful. BDC's application for a court-appointed receiver was also dismissed and it therefore turned to a privately appointed receiver to realize on its security. Deloitte is the bankruptcy trustee. Grant Thornton is the private receiver. Counsel is Boyneclarke for the company, Cox & Palmer for BDC, McInnes Cooper for the trustee, and Stewart McKelvey for BNS.
Imperial Excavating, a Holyrood, Newfoundland-based excavation company, filed for bankruptcy on August 16. Deloitte is the bankruptcy trustee.