JD Norman Canada, ULC, a Windsor, Ontario-based manufacturer of highly engineered metal components for the automotive industry, was placed in receivership on February 12 on application by Callidus Capital Corporation ("Callidus"), owed approximately $146.0 million (USD). The company's largest customer, General Motors ("GM"), representing close to 100% of its business, terminated its business relationship with the company and, as such, the company is no longer able to operate as a viable going concern. In January 2020, the company indicated to GM that it was experiencing severe financial difficulty and would be unable to remain in business without obtaining certain financial accommodations from GM and Callidus. Subsequently, GM entered into an agreement with the company and Callidus in which GM agreed not to resource any of GM's business to a different supplier until at least February 2023. However, in November 2020, after GM claimed that the company had breached its obligations under this agreement, GM notified the company of its intention to resource a substantial portion of GM's business to a new supplier. KSV Advisory was appointed receiver. Counsel is McMillan for the company, Dickinson Wright for the applicant, Osler for the receiver, and Norton Rose for Bank of America, the operating lender.
Rockshield Engineered Wood Products ULC, a Cochrane, Ontario-based manufacturer of plywood used to make a variety of products including furniture and cabinetry, filed an NOI on February 8, listing approximately $15.1 million in liabilities, including $2.9 million to BNS. Due to the seasonal variations in logging roads and poor transport truck access during the warmer months, the company purchases the majority of its raw materials in the winter. During the winter months, the company stockpiles approximately $100.0 thousand worth of logs per week over and above its manufacturing needs. Since the company's expenses during the stockpiling period exceed its revenue from operations, it has historically financed this "bulge" with capital from shareholders. This year, however, the company's shareholders have declined to extend financing for the bulge. In addition to the company's pending liquidity crisis, BNS has issued a demand on its credit facilities, asserting a breach of a debt service ratio covenant. During these proceedings, BNS is providing DIP financing to the company. Dodick & Associates is the proposal trustee. Counsel is Weisz Fell Kour for the company, Pallett Valo for the proposal trustee and Miller Thomson for BNS.
Laurentian University, a public university located in Greater Sudbury, Ontario with over 8,000 students, filed for protection under the CCAA on February 1, listing approximately $321.8 million in liabilities, including $71.6 million to RBC, $18.4 to TD, and $1.3 to BMO. The University cited widening deficits, declining enrolment, and costs related to the COVID-19 pandemic for its financial difficulties. Since the 2014-2015 fiscal year, the University has experienced operational deficits in the millions of dollars each year. With the exception of modest growth experienced in 2020, enrolment has declined each year from 2015 to 2018 and tuition fees remain low, while labour and debt servicing costs have grown substantially. The annual cost to educate each student at the University is approximately $2,000 higher than the average cost when compared to other Ontario universities, and there are far more faculty members than required. Although the University has made efforts to reduce administrative costs, this has resulted in a situation in which the reduced administrative staff has limited ability to focus on potential revenue-generating projects. As part of its efforts to address these operational and financial issues, the University intends to reduce the number of departments and programs it will offer, which cannot be accomplished in a timely manner outside of a CCAA proceeding. Since the University — as a publicly-funded entity — is subject to information requests, it will also be seeking an order that the stay of proceedings also suspends the requirement that the University respond to such information requests during the duration of the CCAA proceedings. During these proceedings, the University will be receiving up to $25.0 million in DIP financing from Firm Capital Mortgage Fund Inc. EY was appointed monitor. Counsel is TGF and Hicks Morley (labour counsel) for the University, Stikeman Elliott for the monitor, Fogler Rubinoff for the DIP lender, Blakes for RBC, Fasken for TD, and Chaitons for BMO.
Yatsen Group of Companies Inc. and various other entities (collectively, the "Applicants"), which are comprised of 38 indirect subsidiaries of Markham, Ontario-based Edjar International Inc. — the largest Japanese quick service restaurant chain in the US with 226 Sarku Japan restaurants across 34 states and Puerto Rico — filed for protection under the CCAA on January 25. The Applicants are currently facing a liquidity crisis, with approximately US$26.8 million of arrears outstanding pursuant to their lease agreements. The Applicants also owe an undisclosed amount to their secured creditor, Wells Fargo Bank. The impact of the COVID-19 pandemic on the Applicants' business has been significant, with extensive restaurant closures and greatly reduced revenues for the 2020 fiscal year. During these CCAA proceedings, the Applicants will be receiving between $500.0 thousand and $5.0 million in DIP financing, depending on whether the Applicants bring a subsequent motion to increase the amount of DIP financing from $500.0 thousand to $5.0 million. Alvarez & Marsal was appointed monitor. Counsel is Goodmans for the Applicants, Osler for the monitor, Chaitons for the DIP lender, and Blakes for Wells Fargo Bank.
10268054 Canada Corp., a Toronto, Ontario-based residential condominium developer, was placed in receivership on January 21 on motion by Centurion Mortgage Capital Corporation ("Centurion"), which had made a secured loan to the company for approximately $16.6 million to finance the company's condo project located at 135 Mandrake Street, Ajax, Ontario (the "Project"). To date, the company has defaulted on its loan by, among other things, failing to deliver a satisfactory construction budget or Project completion schedule to Centurion, and by failing to proceed expeditiously with the construction of the Project. Even though there have been substantial pre-sales of the Project, the company has failed to make any progress on the Project's construction. Furthermore, a review by Centurion into whether the company had applied the advanced funds for proper purposes uncovered that the company appeared to have misapplied over $2.9 million of funds. At this stage, Centurion has no clarity into where the $2.9 million was used and suspects the funds were misappropriated. BDO was appointed receiver. Robins Appleby is counsel for Centurion.
FIGR Brands, Inc., FIGR Norfolk Inc., and Canada's Island Garden Inc. (collectively, the "FIGR Group"), a vertically integrated cannabis business which operates two cannabis facilities (one in Ontario and the other in PEI), filed for protection under the CCAA on January 21, listing approximately $203.4 million in liabilities and $153.2 million in assets. Since commencing operations, the FIGR Group has been cash flow negative and relies on funding from indirect subsidiaries of New Pyxus International ("New Pyxus"), which is the parent company of FIGR Brands, Inc. Alliance One International Tabak C.V. ("AOI Tabak"), one of the New Pyxus' indirect subsidiaries, is owed approximately $189.7 million and is no longer prepared to continue funding the FIGR Group. During these CCAA proceedings, the FIGR Group will be receiving up to $8.0 million in DIP financing from Alliance One Tobacco Canada Inc. FTI Consulting was appointed monitor. Counsel is Bennett Jones for the FIGR Group, Cassels for the monitor, and Chaitons for Alliance One Tobacco Canada Inc.
Rockwater on Main Inc., which owns and oversees the development of a proposed residential site located at 64 Main Street East, Hamilton, Ontario, was placed in receivership on January 21 on application by a mortgagee. The company has approximately $9.0 million of liabilities. The immediate appointment of a receiver and manager will provide necessary stability, transparency, and oversight in the sale and/or development of the site. Goldhar & Associates was appointed receiver and manager. Counsel is Youngman Law for the applicant and Fogler Rubinoff for the receiver and manager.
Allied Track Services Inc., a Grimsby, Ontario-based provider of railroad construction, maintenance, and signal services throughout Canada, filed an NOI on January 21. The principal purpose of the restructuring proceedings is to create a stabilized environment to allow the company to enter a transaction for the sale of its business and assets through a “stalking horse” sale and investor solicitation process. KSV Advisory is the proposal trustee. Counsel is Bennett Jones for the company, Blakes for the proposal trustee and Chaitons for the DIP lender.
Advantagewon Capital Corp., a London, Ontario-based company in the business of providing consumer auto repair loans to individuals, was placed in receivership on January 18 on application by FMMC Private Yield Fund Limited Partnership I ("FMMC"), owed approximately $3.3 million. Following various defaults by the company on its obligations under its credit facilities and security arrangements with FMMC, the applicant demanded repayment of the company's indebtedness. The company, which has not yet made any payments to satisfy FMMC's demand, has discussed a potential sale of the company's assets to Dorsia Capital (London) Inc. Link & Associates was appointed receiver. Counsel is Fogler, Rubinoff for the applicant, Aird & Berlis for the receiver, and Siskinds for the proposed purchaser.
Yoga Centre Toronto, a Toronto, Ontario-based not-for-profit yoga centre, filed for bankruptcy on December 23 after its revenue decreased significantly due to the COVID-19 pandemic and, consequently, the centre could not sustain payment of debts related to the financing of leasehold improvements at its studio and other debts. Albert Gelman Inc. is the bankruptcy trustee.