Penady (Barrie) Ltd ("PBL"), a Toronto, Ontario-based subsidiary of PenEquity Realty, a real estate investment advisor, and PRC Barrie were placed in receivership on March 25 on application by Choice Properties Limited Partnership ("CHP"), the beneficial owner of certain lands abutting real property owned by the companies (the "Barrie Property"). The Barrie Property is approximately 97% occupied, with tenants including Cineplex, Tim Hortons, and McDonald's. PBL, which has $68.2 million in liabilities, previously entered into a secured credit agreement with CHP to assist it with the development of the Barrie Property. During the course of this agreement, PBL defaulted on several occasions, including by missing payments. Although the agreement matured in January 2020, to date, all principal, interest, and other obligations under the agreement remain outstanding. The current monthly rent collected by PBL is insufficient to service its indebtedness and PBL has tried unsuccessfully to sell the Barrie Property for approximately 18 months. RSM was appointed receiver. Counsel is Osler for the applicant, Gardiner Roberts for the companies and Blaney for the receiver.
Pure Global Cannabis (TSXV:PURE), which is engaged in the production and sale of cannabis products in Canada with its subsidiaries (collectively, "Pure Global Group"), obtained protection under the CCAA on March 19. Pure Global Group's primary assets are two real properties in Brampton, Ontario owned by its subsidiaries, 237A Advance and 237B Advance, on which the group's production and warehouse facilities are located (the "Brampton Properties"). In 2018, the company and its primary operating subsidiary, PureSine, issued secured debentures and entered into a collateral agency agreement with Cancor Debt Agency. A year later, the group's precarious liquidity situation caused it to miss a payment that was due under the debentures that the company had issued to certain debenture holders. The group also defaulted on its vendor take back-mortgages for the Brampton Properties. Without a stay of proceedings and interim financing, Pure Global Group will face a complete cessation of its operations. During the CCAA proceedings, Hillmount Capital will be providing DIP financing. EY was appointed monitor. Counsel is Weisz Fell Kour for the company, Osler for the monitor, Cassels for 2056706 Ontario in respect to 237A Advance, Keyser Mason Ball for Kozo Holdings in respect to 237B Advance, McMillan for Cancor Debt Agency, and Fred Tayar & Associates for Hillmount Capital.
Green Relief, a Hamilton, Ontario-based cannabis producer, filed an NOI on March 11, listing approximately $9.7 million in liabilities, including $1.0 million to Cannoleum and $1.9 million to Schilthuis Construction. In early 2019, the company's co-founder and CEO stepped down, and a subsequent forensic investigation initiated by new management revealed that over $14.0 million had allegedly been misappropriated, and the company is now facing a severe liquidity crisis. PwC is the proposal trustee. Counsel is TGF for the company and DLA Piper for the proposal trustee.
HealthChain, a Toronto, Ontario-based company that provides software solutions that integrate with existing healthcare management systems and workflows to make outdated technologies and paper-based processes more efficient, filed an NOI on February 28, listing $1.5 million in liabilities. Dodick & Associates is the proposal trustee. Brauti Thorning is counsel to the company.
Kew Media Group (TSX:KEW), a Toronto, Ontario-based group that develops, produces, and distributes multi-genre audiovisual content worldwide, was placed in receivership, along with two of its subsidiaries, on February 28 on application by Truist Bank in its capacity as the agent for a syndicate of lenders comprising Truist, BMO, and TD (collectively, the "Lenders"). The production company, which was behind shows such as Dance Moms and The Inventor, owes the Lenders approximately $113.8 million. In November 2019, the company announced that its CFO, Geoff Webb, had supplied the Lenders with reports containing inaccurate information regarding working capital. As a result, the company defaulted on its $110.0 million credit facility. In January, the company further announced that its auditor, Grant Thornton, had withdrawn various audit reports as it could not rely on representations made by Mr. Webb. Shortly after, the Ontario Securities Commission issued a temporary cease order of the company's shares. Although TD Securities has been running a sales process for the company, it is apparent from the offers received that the Lenders will still suffer a significant shortfall on the company's debt. FTI was appointed receiver. Counsel is Dentons for the applicant, Goodmans for the group, Torys for the receiver, and Miller Thomson for BMO.
2607380 Ontario, which is in the business of developing and operating a multi-purpose commercial building located at Burlington, Ontario (the "Nuvo Building"), obtained protection under the CCAA on February 26, listing approximately $27.6 million in liabilities, including $17.3 million to Meridian Credit Union and $4.5 million to Crossroads Christian Communications ("CCCI"). In November 2017, the company entered into an agreement with the general contractor, Maple Reinders, to renovate the Nuvo Building. However, in 2019, the renovation schedule began to incur significant delays when Meridian refused to fund the promised additional $2.0 million required to complete renovations. Consequently, the company was unable to pay Maple Reinders, who in turn could not make payments to its subcontractors. As of September 2019, all work at the Nuvo Building has ceased. The company currently requires the flexibility and breathing room provided by the CCAA process to pursue additional renovation financing and restructuring options that would allow for the completion of renovations to the Nuvo Building. Maynbridge Capital will be providing DIP financing during the CCAA proceedings. Richter was appointed monitor. Counsel is Stikeman Elliott for the company, Bennett Jones for the monitor, Gowling for Meridian, McCarthy Tétrault for Maynbridge Capital, and Weirfoulds for CCCI
AVG (OEAM), a Scarborough, Ontario-based automotive accessories operation, was placed into receivership on February 21 on application by RBC, owed approximately $9.8 million. The company, which was founded in 1985 as a distribution, engineering, and development partner for North American automotive OEMs, principally produced accessory parts for Nissan and Toyota. In August 2019, RBC and the company entered into a forbearance agreement after the company defaulted on its credit agreement with RBC. In September 2019, the company sought an extension of the forbearance period set out in the agreement after possible alternate financing fell through and the company could not meet the terms of the agreement. In order to consider the requested extension, RBC engaged BDO to prepare a report on the company's affairs. The BDO report disclosed that 85% of the company's listed accounts receivable were fabricated and certain accounts receivable were uncollectible. BDO was also appointed receiver. Counsel is Aird & Berlis for the applicant and Harrison Pensa for the receiver.
Eureka 93 (CSE:ERKA), an Ottawa, Ontario-based cannabis company that operates one of the largest hemp cultivation and CBD extraction operations in North America, along with its subsidiaries - Artiva, LiveWell Foods Canada, and Vitality CBD Natural Health Products (collectively, the "Group") - filed an NOI on February 14, listing approximately $28.2 million in liabilities. At the end of December 2017, Artiva, Eureka 93's only operating company, acquired a large vegetable farm that it intended to retrofit for the cultivation, processing, and distribution of cannabis, but it has run out of cash and cannot complete construction. Believing that its business will become viable once construction is complete and production begins, the company filed for creditor protection in order to, among other things, obtain interim financing and simplify its capital structure. Deloitte is the proposal trustee. Counsel is Gowling WLG for the Group, Blaney McMurtry for the proposal trustee and Bennett Jones for a group of secured noteholders.
Evergreen Consumer Brands, a Brampton, Ontario-based manufacturer and distributor of personal grooming products under brand names such as Daily Defence, Salon Selectives, and Silkience, was placed in receivership on February 13 on application by National Bank, owed approximately $4.4 million. The company, which defaulted on certain obligations under its credit agreement and forbearance agreements with National Bank, retained Alvarez & Marsal to assist it in obtaining replacement financing and to conduct a sale and investment solicitation process for the business ("SISP"). Although negotiations regarding proposals to purchase the business are ongoing, in light of the company's increasingly distressed financial situation, National Bank believes it is appropriate to appoint a receiver to take carriage of the SISP and identify the most favourable offer. Deloitte was appointed receiver. TGF is counsel to the applicant.
9265988 Canada Corp., a Toronto, Ontario-based that owns the property municipally known as 201, 227 and 235 King Road, Richmond Hill, Ontario, was placed in receivership on February 12 on application by MarshallZehr Group, owed together with other lenders approximately $19.0 million. Dream Maker Developments, the property's developer, was planning to construct 178 stacked townhomes on the property to be known as "Yonge & King Urban Towns". Since the loan was advanced to the debtor in the summer of 2018, however, there has been little progress on the development. No construction has commenced, and the debtor is still in the process of obtaining site plan approval. The lenders have not received a payment since October 2019 and the debtor has provided no information to suggest that it will be in a position to repay the loan on its maturity date. KSV was appointed receiver. Counsel is Chaitons for the applicant and the receiver.