Mt. Cross Pharmacy, a Hamilton, Ontario-based retail pharmacy, was placed in interim receivership on May 16 on application by CWB Maxium Financial, owed approximately $4.6MM. msi Spergel (ICIN) was appointed interim receiver. On June 14, 2018, the applicant sought and obtained a receivership order appointing msi Spergel (ICIN) as the receiver over the company. The pharmacy's business has been negatively impacted by several developments, including the opening of a competing pharmacy located close to Mt. Cross, as well as the pharmacy's website defaulting to that of the competing pharmacy. Counsel is Pallett Valo for the receiver and Miller Thomson for the applicant.
Reliable Bookbinders, a Scarborough, Ontario-based binding servicing and printing company with a 73-year history, filed for bankruptcy on May 14 and was also placed in receivership on the same day. The company's failure can be attributed to the decline in the printing industry, which has affected trade binderies and resulted in reduced sale volumes and price pressures. PwC was appointed receiver and is the bankruptcy trustee.
Rockport Blocker and Rockport Canada et al. (collectively the "Rockport Group"), subsidiaries of Rockport, a West Newton, Massachusetts-based global designer, distributor and retailer of comfort footwear in more than 50 markets worldwide, brought a motion under the CCAA to recognize in Canada the US Chapter 11 bankruptcy proceedings that the Rockport Group filed on May 14. The company partially blamed the separation from its previous owner, Reebok, which sold the company in 2015, for its financial difficulties. The Rockport Group currently owes approximately $53.4MM (USD) under its revolving credit agreement. If the lenders were to require repayment in full of the amounts owed by Rockport Canada, as a co-borrower and under its guarantee of the US debtors' obligations under the agreement, it would be unable to repay the full amount owed. Rockport Canada itself has 64 unsecured creditors that are owed approximately $760.0MM (CAD). The company has entered into an asset purchase agreement to sell substantially all of its assets to CB Marathon Opco, an affiliate of Charlesbank - a private equity group. To facilitate the cooperation between the US and Canadian Court, Rockport Blocker requested that it be recognized to act as foreign representative. Richter was appointed Information Officer. Canadian counsel is BLG for the Rockport Group, Stikeman Elliot for Richter, Gowling WLG for Charlesbank and Goodmans for the senior secured noteholders.
Splash Canyon Waterpark & Resort, a Minesing, Ontario-based waterpark that formerly included a camping park, was placed in receivership on May 7 on application by Romspen, owed approximately $100.8MM. On May 18, 2017, Kawartha Downs, a related corporation also owned by Harvey Ambrose, was placed in receivership on application by Romspen. Splash Canyon was added as a respondent to that proceeding. The Splash Canyon property, which has been closed for more than 6 years, is currently abandoned; the site has fallen into major disrepair and been subject to extensive vandalism. Rosen Goldberg was appointed receiver. Dickinson Wright is counsel to the applicant.
Innovative Steam Technologies, a Cambridge, Ontario-based supplier of heat recovery steam generators that capture and use steam for electricity production and enhanced oil recovery, was placed in receivership on May 1 on application by HSBC, owed approximately $13.1MM (CAD) and $3.0MM (USD). Back in 2015, Aecon Group (TSX:ARE) sold the company, which was a wholly-owned subsidiary, to Fulcrum Capital Partners for approximately $35.0MM. Based on current financial information provided to HSBC, the prospect of the company achieving positive cash flow is bleak: for three months, the company suffered a loss of around $1.7MM, and it reported a deficit of assets to liabilities of $11.2MM. Furthermore, its inability to contract new long-term projects from major customers and obtain further financial support from its shareholders has been commercially catastrophic for the company. Deloitte was appointed receiver. Counsel is Dentons for the applicant and Aird & Berlis for the company and Fulcrum.
Best Option Staffing Solutions (also known as B.O.S.S.), a Brampton, Ontario-based full service staffing agency providing staffing solutions to the transportation, manufacturing and warehousing sectors, filed an NOI on April 27, listing $2.0MM in liabilities. The company had retained the services of a purportedly licensed accountant to do its accounting, including statutory filings with CRA. In the summer of 2017, CRA requested and completed an audit as a result of what appeared to be unusually high Input Tax Credits ("ITCs") reported on the company's HST filings. The audit resulted in an increase in HST payable of approximately $2.0MM for the period of January 2014 to March 2017. It is alleged that the accountant manipulated the sales and ITCs on the HST returns filed with CRA, artificially reducing the company's liability compared to what it was presented. Surplus funds were believed to have been kept by the accountant. BDO is the proposal trustee. Speigel Nichols Fox is counsel to the company.
Building & Development Mortgages Canada (BDMC), a Richmond Hill, Ontario-based administrator of syndicated mortgage loans, had a trustee appointed over its assets following an application made by the Superintendent of Financial Services. Prior to February 1, 2018, BDMC brokered and administered investments in syndicated mortgage loans principally relating to development projects in which Fortress Real Capital or Fortress Real Developments were involved. Over $600.0MM has been invested in BDMC by over 11,000 individual investors, many of whom have invested significant portions of their savings in these loans. Following numerous complaints from investors regarding BDMC's activities and the performance of their investments, the Financial Services Commission of Ontario launched an investigation that ultimately led to a settlement agreement on January 31 under which FAAN Mortgage Administrators (FAAN) was appointed as the arm's length, independent manager of BDMC's business. FAAN has advised that BDMC has been struggling to make a number of important payments, including payroll, rent, and payments due under its administration agreement. Additionally, on April 13, the RCMP executed search warrants at BDMC's offices. For these and certain other reasons, FAAN determined that it was not prepared to continue to act without court protection and direction, as required. The Court has now formally appointed FAAN as trustee. Counsel is Aird & Berlis for the the Superintendent of Financial Services and Osler for the trustee.
Agriculture Technology Inc and several related companies (ATI), Ontario's largest agricultural waste recycler, based in Cottom, Ontario, was placed in receivership on April 18 on application by BMO, owed approximately $15.0MM. Since 1998, ATI has offered a specialized process by which customers' agriculture waste is converted into saleable end products including reusable grow media and repurposed plastic products. MNP was appointed receiver. Counsel is Chaitons for the applicant and Miller Thomson for the receiver.
Surefire Bioenergy, an Amherstburg, Ontario-based company specializing in bioenergy and bio-mass pelletizing, was placed in receivership on April 17 on application by BNS, owed $240.0M. BDO was appointed receiver. Counsel is Harrison Pensa for the applicant and Kirwin & Partners for the company.
Greencore Composites, a Sarnia, Ontario-based manufacturer of natural fiber reinforced thermoplastic materials, was placed in receivership on April 16, listing approximately $1.2MM in liabilities. Growthworks Commercialization Fund, Wayne Meddever and Ian Inch appointed Dodick Landau as private receiver.