PharmHouse Inc., a licensed cannabis producer with an operating facility in Staples, Ontario, obtained protection under the CCAA on September 15, listing approximately $170.9 million in liabilities and $187.7 million in assets. Since August, the company has relied on $1.2 million in funding from Canopy Rivers Corporation ("Rivers") to meet its immediate cash needs. In order to establish its operating facility, increase its cannabis production capabilities, and grow its business, the company has expended significant resources to date, including funds from equity and debt financing. As a result, the company has now exhausted its cash on hand, including its $90.0 million non-revolving credit facility. Absent urgent additional funding and a restructuring of its business, the company will face an immediate cessation of its operations. Although Rivers has advised that it is no longer willing to provide the company with funding on an unsecured basis, it will be providing DIP financing during the CCAA proceedings. EY was appointed monitor. Counsel is Bennett Jones for the company, BLG for the monitor, and Cassels Brock for Rivers.
Geox Canada Inc., which is indirectly controlled by Geox SpA ("Geox"), a global shoe and clothing retailer based in Italy, filed an NOI on September 8. Since the beginning of the COVID-19 pandemic, traffic in stores in North America remains more than halved. In the first half of 2020, Geox's revenues amounted to $7.2 million (EUR), representing a 54% decrease compared to the first half of 2019. At this time, the company is utilizing the stability afforded by the NOI to consider its various restructuring options. Geox, which has been restructuring its operations for several years, intends to streamline its physical store network and focus on its online business. Richter is the proposal trustee. Counsel is Aird & Berlis for the company and Fasken for the proposal trustee.
RJ Burlington Inc., a Burlington, Ontario-based indoor trampoline park and franchisee of Rockin' Jump International, filed for bankruptcy on September 3, listing approximately $2.5 million in liabilities. Albert Gelman is the bankruptcy trustee.
SFP Canada Ltd., a Mississauga, Ontario-based company that operates 76 retail stores across Canada under the Papyrus, Carlton Cards, and Paper Destiny brand names, filed for bankruptcy on August 20, listing approximately $7.7 million in liabilities, including $5.1 million to American Greeting Corporation. The company had already filed for CCAA protection in January 2020 and liquidated substantially all of its assets. Richter is the bankruptcy proposal. Canadian counsel is Osler for the company and Blakes for American Greeting Corporation.
TLC Vision (Canada) Corp., a Toronto, Ontario-based company which operates a laser eye centre in London, Ontario, filed an NOI on August 7, listing approximately $7.3 million in liabilities, including $6.3 million to CRA. With the COVID-19 pandemic, the company has been unable to operate its business and cannot defray its fixed costs which continue to accrue. In addition, key medical personnel have withdrawn their services with the intention of opening competing businesses after services open again. Farber is the proposal trustee. Weisz Fell Kour is counsel to the company.
Chico’s FAS Canada, Co. ("Chico's Canada"), which operates stores in Southern Ontario under the Chico’s and White House Black Market names, filed for bankruptcy on July 31. The bankruptcy process will result in the closure of four Chico’s and six White House Black Market boutiques in Ontario, which have remained closed since March 17 due to the COVID-19 pandemic. The closure of the Canadian boutiques is part of the company’s ongoing cost-savings measures taken to mitigate the impact of the COVID-19 pandemic and address the operational and financial challenges associated with operating in Canada. Chico’s Canada will transition to a digital-only business in Canada. KSV is the bankruptcy trustee. Counsel is Paliare Roland for the bankruptcy trustee and Osler for Chico’s Canada and its parent, Chico’s FAS, Inc..
Renaissance Printing Inc., a Toronto, Ontario-based industrial printer that provides premium services to publishers and marketers, was placed in receivership on July 30 on application by Michael Vernon Fredericks and Sue Fredericks, owed approximately $3.0 million. Since 2019, the company has faced serious financial difficulties and cashflow problems and has not been able to meet its obligations as they become due. EY was appointed receiver. Dentons is counsel for the applicants.
ANN Canada Inc., a Toronto, Ontario-based premium fashion speciality retailer of women's apparel sold under the Ann Taylor and LOFT brands, and Tween Brands Canada Stores Ltd., which sells apparel under the Justice brand, filed NOIs on July 23, respectively listing $8.6 million and $7.9 million in liabilities. Ascena Retail Group, which indirectly owns the two companies, has not been profitable for the last several years and reported a net loss of approximately $661.0 million (USD) for the fiscal year ended August 2019. The companies have also been severely impacted by the changing retail landscape and, more recently, by the COVID-19 pandemic and containment measures implemented by the US in the various jurisdictions in which they operate. Weeks before filing the NOIs, the companies solicited offers from various liquidators to proceed with a liquidation of their assets. PwC is the proposal trustee. Stikeman Elliott is counsel to the companies.
Feronia Inc. (TSXV:FRN), a Toronto, Ontario-based company which operates palm oil plantations in the Democratic Republic of the Congo (“DRC”) with its subsidiaries (collectively, the "Feronia Group"), filed an NOI on July 23, listing approximately $38.4 million in liabilities, including $30.4 million to the CDC, a UK development finance institution. The Feronia Group experienced significant financial difficulties for multiple years due to depressed market prices, unfavourable operating conditions, and delays in certain capital projects. As of June 30, the Feronia Group had funded debt obligations totaling approximately $86.0 million (USD). In May, the company entered into a restructuring support agreement with its key stakeholders, which provides for, amongst other things, a back-stop offer from Straight KKM 2 Ltd. ("KKM"), one of the company's largest shareholders. In the same month, the company engaged EY as financial advisor to conduct a sale process to market and sell its interest in the DRC operating subsidiary. As a result of the sale process, the company and KKM negotiated and entered into a purchase agreement. While under creditor protection, the company intends to bring a motion to seek court approval of the purchase agreement and sale transaction. EY is the proposal trustee. Counsel is Aird & Berlis for the company and DLA Piper for KKM.
William Peak Co-Operative Homes, a social housing property located at 1990 Whites Road, Pickering, Ontario, was placed in receivership pursuant to the Housing Services Act on July 22 on application by the Regional Municipality of Durham. An auditor's management letter issued in January 2020 noted significant deficiencies in the internal controls of the co-op's finances, including those related to conflicts of interest, financial statement accuracy, housing charges arrears and control over credit cards. In response, the municipality, as the designated service manager, appointed Deloitte as interim receiver in February 2020. Deloitte reported several areas of concern, including payments to parties related to board members, payments to contractors where payments were not commercially reasonable, credit card purchases using the co-op's card that did not appear to reflect legitimate expenses and potential misappropriation of housing charge payments. In June, the Region determined that a court-appointed receivership was required to finish stabilizing the co-op's operations and locate and train new members to become the co-op's new board of directors. Deloitte is the receiver. Blaney McMurtry is counsel for the receiver.