Southmount Healthcare Centre Inc. and certain affiliated companies (collectively, the "Debtors"), which together owned and operated seven medical office buildings and a parking lot across Ontario, were placed in receivership on June 29 on application by American General Life Insurance Company, Lexington Insurance Company and The Variable Annuity Life Insurance Company (collectively, the "Applicants"), owed approximately $68 million. In 2016, the Debtors owned three medical office buildings. The Applicants advanced a loan to the Debtors in the principal amount of $70 million to allow the Debtors to purchase four more medical office buildings and a parking lot and to refinance the three buildings that were already owned. The Debtors have failed to make a payment under the loan since December 2019, before the COVID-19 pandemic. KPMG was appointed receiver. Counsel is Blakes for the Applicants, Norton Rose for the receiver and Weisz Fell Kour for the legal owners of the properties.
Sunrise Acquisitions (Hwy 7) Inc., the owner of the Unionvillas townhome development project in Markham, Ontario (the "Project"), was placed in receivership on June 9 on application by KingSett Mortgage Corporation ("KingSett"), owed approximately $2 million. Since 2015, KingSett has provided senior secured financing to the company to enable the development of the Project, which comprises 52 built townhomes. In addition to KingSett, the other primary financing source for the Project was a syndicated mortgage financing arranged by Fortress Real Developments Inc. and administered through Sorrenti Law. In May 2021, the company defaulted under its loan facility with KingSett by failing to make a required interest payment, which remains unpaid to date. KingSett has lost faith in the company's management and wishes to exercise its rights to appoint a receiver to market and sell the company's assets and properties. KSV was appointed receiver. Counsel is Bennett Jones for the receiver, Cassels for the applicant, and Osler for FAAN Mortgage Administrators Inc., in its capacity as trustee of Sorrenti Law.
ADG Architectural Design Group Inc., a Markham, Ontario-based architectural firm specializing in design, building programming, and urban design, filed for bankruptcy on June 28, listing approximately $145.4 thousand in liabilities, including $34 thousand to CRA. The company attributes its financial difficulties primarily to operational inefficiencies coupled with financial stress related to the COVID-19 pandemic. MNP is the bankruptcy trustee.
Certus Automotive Inc. and Keen Point International Inc., which provide engineering, manufacturing, and distribution services with respect to specialized chrome plating products for the automotive industry, were placed in receivership on June 25 on application by TD, owed approximately $10.3 million (CAD) and $7.4 million (USD). The companies operate their business through a group of 12 companies known as the "Certus Automotive Group", with facilities located in Ontario, Michigan, Texas, China, Mexico, and Germany. The companies incurred significant and unexpected costs, losses, delays, and quality control problems associated with the construction and initial operations of the plant located in Mexico. Despite being granted a forbearance agreement by TD, the companies have repeatedly defaulted under this agreement and have also failed to close either a financing or sale of their assets. In November 2019, the companies entered into loan arrangements (the "FGI Loan") with FGI Worldwide LLC ("FGI"). In connection with the FGI Loan, TD agreed to subordinate its security interest against the companies' assets and properties to FGI, except as against certain machinery and equipment. TD has lost confidence in the companies and is especially concerned about the developments surrounding the Mexican plant. Deloitte was appointed receiver. Counsel is Miller Thomson for the applicant, Bennett Jones for the companies, Dentons for the receiver, and Blakes for FGI.
Spartan Bioscience Inc., an Ottawa, Ontario-based innovative DNA diagnostics company that conducts molecular testing for medical infectious disease, environmental monitoring, and animal diagnostics, had its NOI proceedings continued under the CCAA on June 21. After market introduction, the company's testing device showed a higher than previously observed incidence of returning "inconclusive" results than its clinical trials. Due to these technological challenges, the company faced significant near-term financial pressure, owing in large part to its efforts to ramp up manufacturing and build product inventory to supply the test kits as quickly as possible. This, combined with not being able to ship and bill for its COVID-19 test product, put the company in a working capital shortage and rendered it insolvent. To address its liquidity crisis, the company filed an NOI on April 5 pursuant to the BIA. The company has now sought to continue the NOI proceedings under the CCAA. EY is the monitor. Counsel is Norton Rose for the monitor, Dentons for the company, Vincent Dagenais Gibson for certain shareholders of the company, and Lenczer Slaght for the directors of the company.
Ryding Regency Meat Packers, a Toronto, Ontario-based meat processing company, filed for bankruptcy on June 15, listing approximately $5.2 million in assets and $10.4 million in liabilities, including $7.4 million to Tri-Pet Holdings Incorporated. In 2019, the company closed after the Canadian Food Inspection Agency ("CFIA") revoked its processing licence due to ongoing food safety concerns. On June 10, 2021, the CFIA laid charges against the company for various alleged offences of the Safe Food for Canadians Act and the Food and Drugs Act. Schwartz Levitsky Feldman is the bankruptcy trustee.
Team Syntegrity Americas Inc., a Toronto, Ontario-based provider of business consultancy services, filed for bankruptcy on June 11, listing approximately $15.7 million in liabilities, including approximately $14.6 million to RTI International ("RTI"), a North Carolina-based leading non-profit research institute, and RTI Syntegrity ("RTIS"). In June 2016, the company was acquired by RTI, which subsequently incorporated RTIS to be the direct owner of 100% of the company's shares as part of the acquisition. Since this acquisition, RTI has funded the company's sustained losses. In May, however, RTI notified the company's board of directors that it would cease funding the company at the end of the month. KPMG is the bankruptcy trustee. Torys is counsel for KPMG.
The Estate of Paul Zigomanis (the "Estate") was placed into bankruptcy on June 10 by Farber, the estate trustee during litigation, for the general benefit of creditors. In April 2015, Paul Zigomanis was killed as a result of an explosion that destroyed the home in which he was living. The estate is insolvent and the bankruptcy filing was initiated in order to conduct a claims process and facilitate a distribution to creditors. Farber is the bankruptcy trustee.
Pulse RX Inc. and Family Pharmacy Clinic Inc., Woodbridge, Ontario-based companies which carry on business as a pharmacy focusing on servicing long term care and retirement residences, were placed in receivership on June 10 on application by 1951584 Ontario Inc. (dba Maxium Financial Services), owed approximately $1.4 million pursuant to a fixed rate promissory note between the companies and the applicant's predecessor in title, Desante Financial Services Inc. The companies have not made any payments to the applicant since June 2020. MNP was appointed receiver. Counsel is Wilson Vukelich for the applicant and Weisz Fell Kour for the receiver.
Datawind Inc. (aka Jeotex Corporation and aka Jeotex Inc. ("Jeotex")), a Mississauga, Ontario-based developer and manufacturer of low-cost tablet computers and smartphones, was adjudged bankrupt on June 10 on application by Greenwoods GRM LLP ("Greenwood"), a UK-based judgment creditor of the company. In 2017, Greenwood commenced a claim against Jeotex for unpaid legal fees and the UK High Court granted judgment in favour of Greenwood (the "Judgment"). In 2018, Greenwood enforced the Judgment in Ontario, which Jeotex unsuccessfully attempted to appeal. In 2019, Greenwood then filed a bankruptcy application against Jeotex in the Ontario Superior Court of Justice. At the time the application was filed, Jeotex had ceased making rent payments to its landlord in Quebec and was ordered by the Court to remedy its default or face eviction. Jeotex failed to abide by the Court order and was subsequently evicted from the property. Despite obtaining several Court orders within the UK and Ontario, Greenwood has been unable to collect on the Judgment for the past four years. Greenwood has also continued to incur costs unnecessarily due to Jeotex's attempts to litigate matters that, in Greenwood's view, had no merit or chance of success. In order to protect the interest of creditors, Greenwood sought a bankruptcy order to allow for the equitable distribution of Jeotex's assets and its subsidiaries in the UK, India, and the United States. Albert Gelman Inc. is the bankruptcy trustee. Counsel is Macdonald Sager Manis for Greenwood and Page Martin for the company.