an early stage cannabis cultivation company that is in the process of building a facility in Chatham, Ontario, was placed in receivership on September 19 on application by Auxly Cannabis Group, owed approximately $16.2 million. The company's facility is approximately 90% complete and it has submitted its application for a cultivation license. The company's loan from Auxly, which was used to finance the acquisition of the Chatham land and the construction of the facility, matured in August 2019 and the company has been unable to refinance the loan or otherwise put forward a proposal acceptable to Auxly. Farber was appointed receiver. Counsel is Bennett Jones for the applicant and Siskinds for the company.
Wisp Internet Services, a Port Perry, Ontario-based internet service provider, filed an NOI on August 29, listing $8.5 million in liabilities. Focusing on providing high-speed internet services to thousands of residents in rural Ontario, the company attributes its financial difficulties to heavy storm damage to its tower network that caused internet service outages. This in turn led to a loss of customers and costly repairs to its tower network. The company intends to file a proposal to its creditors in the coming months which includes a restructuring of its operations. Dodick Landau was appointed proposal trustee.
3070 Ellesmere Developments, an Ontario corporation that owns a vacant parcel of land municipally known as 3070 Ellesmere Road, Scarborough, Ontario, filed an NOI on August 20, listing $29.4 million in liabilities. The property was purchased in January 2014 with the intention of developing a 26-storey residential condominium tower. Within 6 months, the company had sold 80% of the units and needed a partner who could assist in implementing the planning and construction aspects of the project. A joint venture agreement was struck with 2518358 Ontario Inc. ("Rise"). The company's relationship with Rise has broken down, with the company alleging that Rise failed to inject the necessary equity and failed to advance the project, including securing construction financing and commencing construction. The company also alleges that Rise has blocked the company's attempts at advancing joint venture discussions with alternative partners. The company intends to sell the property through a stalking horse sales process while under creditor protection. Co-Stone Development and Campus Suites together are acting as the stalking horse purchaser. Crowe Soberman was appointed proposal trustee. FAAN Advisors is the proposed Chief Restructuring Advisor. Cassels Brock is counsel for the company.
Gedex Systems, a Mississauga, Ontario-based developer of airborne geological imaging technology, obtained protection under the CCAA on August 12, on application by FCMI, a secured creditor owed approximately US $10.3 million. Gedex was in the process of developing a proprietary system to discover and develop underground mineral and oil and gas resources but had not yet reached the stage of commercial profitability. Facing a working capital deficiency of over US $9.5 million and an operating deficit in excess of US $91.8 million, the company recently laid off all of its remaining employees and was canvassing the market for a potential purchaser or investor. The CCAA filing is intended to preserve the going concern value of the company while a court-supervised SISP is conducted. Zeifmans is the monitor. Counsel is Dentons for the applicant, DLA Piper for the company and Miller Thomson for the monitor.
D Films Corporation, a Toronto, Ontario-based independent Canadian film distribution company, was placed in privately appointed receivership on August 9 by Bank Leumi USA, owed approximately $3 million. The company focused on the acquisition and distribution of long-term exclusive rights of both motion picture and television content and made strategic investments with major global film producers including NBCUniversal and Miramax Films. The company had been experiencing losses and cash flow problems for some time, and with no further funds available to be injected from any source, Bank Leumi USA lost confidence in management. Ira Smith Trustee & Receiver was appointed receiver. Counsel is Goodmans for the secured creditor.
Jack Cooper Ventures, a Kennesaw, Georgia-based auto hauler that recently filed for Chapter 11 bankruptcy protection, obtained an initial recognition order in Canada on August 9. Founded in 1928, the company has grown to be the largest provider of finished vehicle logistics in North America, but in recent years it has experienced significant declines in revenue as a result of overall declines in the automotive industry, as well as a loss of market share to lower cost, non-unionized competitors. In Canada, the company has approximately 181 employees. The company is putting forward a restructuring plan that will see its lenders cancel more than $300 million of debt as part of a transaction to purchase all or substantially all of the company's assets. Alvarez & Marsal was appointed information officer. Canadian counsel is Osler for the company, Stikeman Elliott for the information officer, Goodmans for the DIP ABL lender, Bennett Jones for the DIP Term Loan Agent and Cassels Brock for Cerberus.
Skywell Homes, an Ottawa, Ontario-based home builder, was placed in receivership on August 8, on application by Cardar Investments, owed approximately $2.7 million. The company had already filed for bankruptcy on October 9, 2018. Prior to bankruptcy, the company was in the process of applying for a land severance application in respect of two single dwelling homes. The severance application was needed in order for the properties to be sold separately. In order to ensure the application was not impacted and in order to maximize value for a potential disposition of the two properties separately, Cardar waited until the severance application was granted in July before proceeding with the receivership application. PwC was appointed receiver. Counsel is Brauti Thorning for the applicant and Blakes for the receiver.
2547357 Ontario Inc., owner of the property municipally known as 365 Bayly Street West, Ajax, Ontario, was placed in receivership on August 7 on application by a group of secured creditors owed approximately $2.6 million. The company's property is a vacant piece of land on which the debtor had planned to build a car dealership. The debtor subsequently failed to make interest payments on the loan due to its bank account being frozen. When counsel for the applicants proposed a consensual arrangement to sell the property through CBRE, it learned that the debtor had already signed an exclusive listing agreement with another brokerage. Concerned that it would be cumbersome, if not impossible to achieve a sale of the property on a consensual basis, the applicants moved to have a court-supervised officer appointed to properly market and sell the property. Rosen Goldberg is the receiver. Counsel is Dickinson Wright for the applicants.
Davids Footwear, a Toronto, Ontario-based luxury women’s shoe retailer, was placed in receivership on August 2 on application by Rosejack Investments, owed approximately $9.0 million. With a history dating back to 1954, the company has historically been profitable but, like many other footwear retailers, it has faced challenges in recent years. Rosejack, a company affiliated with menswear retailer, Harry Rosen, acquired the company in 2017 with plans to add stores across the country. The expansion never took place though, and the company's most recent financial statements indicated a loss of almost $1.0 million. The company attempted to seek rent concessions from the landlords of its Mink Mile and Sherway Gardens locations but was not successful. Additionally, the company recently learned that it would be losing one of its key brands, Valentino, as the footwear supplier has plans to expand its own stores in the company's territory. With all forecasts indicating further losses for a number of years that would require additional cash injections, Rosejack made the decision to seek the appointment of a receiver to effectuate an orderly wind down of the business. Richter was appointed receiver. Counsel is BLG for the applicant and Fasken for the receiver.
Ideal (JS) Developments, a single purpose corporation related to Markham, Ontario-based real estate developer, Ideal Developments, was placed in receivership on August 1 on application by Vector Financial Services and Downing Street Financial, together owed approximately $15.4 million. The corporation owned vacant land in Richmond Hill, Ontario on which it was planning to develop a 96 unit townhouse project. Construction had not yet begun when the company's loan with the applicant matured in October 2018. Despite several extensions, the company has been unable to obtain construction financing or take-out financing. Fuller Landau was appointed receiver. Counsel is Blaney McMurtry for the applicant, Friedman Law for the company and Aird & Berlis for the receiver.