Samboro Luggages, a Richmond Hill, Ontario-based distributor and wholesaler of branded travel luggage, was placed in receivership on June 18 on application by HSBC Bank Canada, owed approximately $317.3 thousand (USD) and $2.0 million (CAD). The company assigned itself into bankruptcy on June 9, which constituted an event of default under the company's loan documents with the bank. Farber is the receiver and bankruptcy trustee. TGF is counsel to the applicant.
Stableview Asset Management Inc., Stableview Yield & Growth Fund, Stableview Progressive Growth Fund, Stableview Insight Fund LP and Stableview Insight Fund GP Inc. (collectively, the “Stableview Group”), a Toronto, Ontario-based financial asset management firm, was placed into receivership on June 9 on application by the Ontario Securities Commission (the "OSC"). In January 2019, an OSC compliance review found that the Stableview Group — along with its sole director and officer — engaged in conduct that breached the Securities Act in a number of fundamental ways, including causing the funds to become significantly over-concentrated in investments of a penny stock named Clarocity Corp. Although Clarocity's financial circumstances deteriorated during the period the Stableview Group invested in the company, Stableview continued to direct investments into Clarocity. The investments subsequently caused the funds to breach their investment restrictions. As a result of these breaches, in November 2019, the OSC imposed conditions on the Stableview Group's registrations with the OSC, including trading and financial restrictions as well as prohibitions on redemptions without approval. Since those steps were taken, however, the OSC alleges that the Stableview Group and its sole director and officer continue to engage in misconduct. A receivership proceeding was initiated in an attempt to protect investors' interests while investigation and enforcement efforts continue. Grant Thornton was appointed receiver and manager. Counsel is Chaitons for the receiver and Wright Temelini for the Stableview Group.
Beleave Inc. (CSE:BE, OTCQX:BLEVF), a licensed producer and seller of cannabis and cannabis related products, along with certain affiliates (collectively, the "Beleave Group"), obtained protection under the CCAA on June 5, listing over $18.0 million in liabilities. The Beleave Group, which sells to five Canadian provinces, has experienced negative cash flow since its inception. In particular, it spent significant resources to construct and expand the processing capacity at its production facility in Hamilton, Ontario. Although the Beleave Group has pursued a number of strategic initiatives to improve its financial position, certain of these initiatives have been unsuccessful, including efforts to sell its cannabis licence. Unless CCAA proceedings are implemented, the Beleave Group will not be able to continue operating. The Beleave Group intends to commence a stalking horse sale process in order to sell its assets and operations for the benefit of its creditors and other stakeholders. Grant Thornton was appointed monitor. Counsel is Miller Thomson for the Beleave Group and Fasken for the monitor.
Peraso Technologies Inc., a Toronto, Ontario-based semiconductor company specializing in the development of integrated circuits and chipsets for the new generation of wireless technology, obtained protection under the CCAA on June 3, listing approximately $6.7 million in liabilities to Roadmap Capital and $1.0 million to Polar Multi-Strategy Master Fund. The company is currently facing significant liquidity issues due to, among other things, multiple legal proceedings brought against it in Canada and the US by its largest customer, Ubiquiti Inc. As a result of these proceedings, the company was unable to sell its products to customers other than Ubiquiti, potential purchasers were deterred from acquiring the company, and the company could not obtain viable financing. The COVID-19 pandemic has further exacerbated the company's efforts to obtain financing or engage in a strategic transaction as the financial markets have become significantly more risk-averse. The company anticipates that it will run out of cash by late June, at which point it will be forced to cease operations. EY was appointed monitor. Canadian counsel is TGF for the monitor, Stikeman Elliott for the company, and Aird & Berlis for Ubiquiti Networks Canada Inc.
Comark Holdings Inc., Bootlegger Clothing Inc., cleo fashions Inc. and Ricki's Fashions Inc. (collectively, the "Comark Group"), leading Canadian specialty apparel retailers with a nationally recognized portfolio of exclusive private label brands, obtained protection under the CCAA on June 3, owing approximately $26.4 million to CIBC. A combination of factors have resulted in a severe liquidity crisis for the Comark Group, including the COVID-19 pandemic, a difficult economic environment in Alberta arising from declining oil prices, and a worsening retail environment. Between March and May, the Comark Group lost over $50 million dollars in sales, and in its last fiscal year, it experienced a net operating loss of $7.6 million. Given these financial difficulties, the Comark Group has been unable to pay rent for its retail stores and, as such, has received notices of defaults from its landlords with respect to 56 stores. Without additional funding, the the Comark Group will have no available liquidity after June. Alvarez & Marsal was appointed monitor. Counsel is Osler for the Comark Group, Goodmans for the monitor and BLG for CIBC.
New Tecumseth Land Corporation, a company owning real property located at 6485 14th Line, Alliston, Ontario, was placed in receivership on June 1 on application by FirstOntario Credit Union, owed approximately $6.5 million. Spergel (GRIP) was appointed receiver. Flett Beccario is counsel for the applicant.
First Hamilton Holdings Inc., a Toronto, Ontario-based investment corporation specializing in high yield bonds, along with its subsidiaries, was placed in liquidation on May 21, listing approximately $34.0 million in liabilities. The company, whose business is closely related to PACE Securities Corp. ("PSC"), attributes its financial difficulties to various factors, including the COVID-19 pandemic, which resulted in the company having to respond to margin calls by Laurentian Bank Securities ("LBS"), PSC's carrying broker and the custodian of the securities of the company's clients. While the company was able to reach certain arrangements with LBS in April, the company was required to liquidate significant portions of its portfolio of corporate bonds to meet LBS' new margin requirements. This reduction in the assets of the company's portfolio meant lower interest income from the corporate bonds which it held. The company was also forced to sell its corporate bonds at prices substantially less than their acquisition costs. MNP was appointed liquidator. Dickinson Wright is counsel to the companies.
Green Growth Brands Inc., GGB Canada Inc., Green Growth Brands Realty Ltd. and Xanthic Biopharma Limited (collectively, the "GGB Group") (GGB:CNX), a cannabis enterprise that is licensed to grow, process and sell cannabis in various US jurisdictions, obtained protection under the CCAA on May 20, listing over $100.0 million (USD) in liabilities. The GGB Group, which was funded through equity and debt, has always been cash flow negative. Commencing in early 2019, the Group began to experience liquidity issues. These problems were compounded by the COVID-19 pandemic, and the GGB Group was forced to indefinitely suspend its business selling CBD-infused consumer products. All Js Greenspace, one of GGB Group's existing secured lenders, will be providing up to $7.2 million (USD) in DIP funding during these CCAA proceedings. EY was appointed monitor. Counsel is Stikeman Elliott for the companies, Osler for the monitor, and McMillan for All Js Greenspace.
HyperBlock (CSE:HYPR), a Toronto, Ontario-based company that operated one of the largest cryptocurrency mines in North America, filed for bankruptcy on May 19, listing approximately $10.4 million in liabilities, including approximately $5.0 million to Project Spokane and $2.8 million to Sean Walsh. On May 14, the company's electricity provider terminated its long-term power contract with the company. This termination, combined with the impact of the recent Bitcoin algorithm halving which cut the company's mining rewards in half, and the company's generally deteriorating working capital position, made it unable and uneconomical to continue operations. Crowe Soberman is the bankruptcy trustee.
Tribalscale Inc., a Toronto, Ontario-based technology company that provides customized enterprise software services to Canadian and American companies, filed an NOI on May 19, listing approximately $5.8 million in liabilities, including $2.5 million to 1924191 Ontario Inc. The company experienced early success when it started its business in 2015. However, it attributes its current financial difficulties primarily to a slowdown in receipt of new contracts in 2019 and a delay in collections from certain existing customers due to disputes, coupled with high operating and payroll expenses. The COVID-19 pandemic further reduced the spending power of the company's existing and prospective customers. Prior to filing the NOI, the company had made certain operational changes as part of a restructuring to address its liquidity challenges., including reducing its employee headcount. In addition, between the summer of 2019 and spring of 2020, the company was in discussions with various potential purchasers which culminated in a potential deal to sell its going concern business. Due to COVID-19, however, the potential purchaser opted not to close the transaction. MNP is the proposal trustee. Counsel is Weisz Fell Kour for the company, BLG for the proposal trustee, and GSNH for 192 Ontario.