Mohawk Trail Properties Inc., 2317159 Ontario Inc., and Mohawk Inn & Suites Management Inc., a related group of primarily land holding companies based in Toronto and Milton, Ontario, had a receiver appointed over their assets on August 3, on application by Cortland Credit Lending Corporation as agent for certain lenders. Mohawk Trail Properties Inc. was the borrower under the loan agreement, while 2317159 Ontario Inc. and Mohawk Inn & Suites Management Inc. provided guarantees. Starting in June 2019, as a result of certain material breaches and defaults (including monetary defaults) under the loan agreement, the parties entered into a series of forbearance agreements. However, the companies have been unable to repay the loan and, as of July 23, 2021, owed approximately $17 million to the lenders. A sale process for the companies' assets was approved on the same day that the companies were placed in receivership. PwC was appointed receiver. Counsel is Dentons for Cortland Credit Lending Corporation and Stikeman Elliott for the companies.
Industrial Automation Components Corporation, a London, Ontario-based electrical equipment and supply wholesaler, filed for bankruptcy on July 29, listing approximately $588 thousand in liabilities, including $179 thousand to Quantum First Automation. Since inception, the company has been under-capitalized. As a result, the company came to rely on high interest credit facilities as a primary source of working capital. Furthermore, for many years the company's profit has been on the decline due to narrowing product margins in response to industry-wide changes eliminating third-party suppliers. More recently, sales in key industries including Canadian pulp, mining, and petrochemical have been on the decline and worsened following the 2020 global pandemic. Lacking sufficient working capital to maintain normal operations or to fund a restructuring of the business, the company decided to stop operating on July 28. MNP is the bankruptcy trustee.
Mississauga Metals & Alloys Inc., a Brantford, Ontario-based metal recycling company, filed an NOI on July 20, listing approximately $27.7 million in liabilities, including $15.9 million to Scotiabank. In 2019, the Canadian Nuclear Safety Commission ("CNSC") issued an order to the company requiring it to cease managing radioactive waste at its facility until the CNSC had accepted an updated radiation protection program. Richter is the proposal trustee.
Generous Space Ministries, a Mississauga, Ontario-based non-profit LGBTQ+ Christian ministry, filed for bankruptcy on July 15. Albert Gelman is the bankruptcy trustee.
Morrison Laurier Mortgage Corporation, a Toronto, Ontario-based mortgage investment corporation (the “Company”) that invests in mortgage loans to builders, developers, and owners of commercial, industrial, and residential real estate, had HPI Advisory Inc. appointed as Marketing and Mortgage Agent, as directed by inspectors also appointed. The order was obtained on consent by a majority of the Company’s stakeholders, with powers to wind up the affairs of the company pursuant to section 207 of the Ontario Business Corporations Act and to deal with the assets of the Company, including an eight storey mixed use project located in Barrie, Ontario (the "Collier Centre") whose mortgage had gone into default and which was in the process of a “work out” when the project was significantly impacted by the current pandemic. Title to the Collier Centre had been transferred under power of sale to an affiliate of the Company in 2019. The Company had continued to operate and manage the Collier Centre through Crown Realty Partners, Index Construction, and Cushman & Wakefield which will now be overseen by the Marketing and Mortgage Agent and the Inspectors as appointed by the court. In an earlier version of this article, reference was made to Morrison Financial Mortgage Corporation (“Morrison Financial”) which had been the Investment Manager of the Company until July 2020, and as to unproven and unsubstantiated claims raised against it and others by the Company board in a claim issued in November 2020 (but not served until April 2021) which action is currently in abeyance with no defences being required. However, the allegations have been denied, and, as set out in documents filed, Morrison Financial had successfully defended prior similar allegations raised against it by the Company board in 2020, which the Commercial List Court rejected holding that they were unfounded and that there was no misconduct by Morrison Financial and no harm caused to the Company. Further to the consent order, the Marketing and Mortgage Agent will continue to consult with Morrison Financial regarding the Collier Centre to assist in realizing on the Company’s investment. All of these facts were not set out in the prior version of this reporting and Insolvency Insider apologizes and regrets any confusion this may have caused. HPI Advisory Inc. was appointed Marketing and Mortgage Agent and Miller Thomson LLP is counsel to HPI Advisory Inc.
Russell Hill Investments Limited, a Concord, Ontario-based company that was incorporated to purchase and develop three residential properties located on Russell Hill Road in Toronto (the "Russell Hill Properties"), filed for bankruptcy on June 30, listing approximately $14.9 thousand in assets and $4.2 million in liabilities, including $2 million to Alexandria Bancorp Limited and $2.1 million to Shetfield Management Ltd. After the Russell Hill Properties were sold in 2014 for approximately $10.5 million, with the proceeds used to repay the first mortgage to BMO, the company paid $1.5 million to purchase another property in Toronto for the purpose of rental income and re-development. It was sold in March 2020 for $2.4 million, with the proceeds used to pay the first mortgage to BMO. Currently, there are not sufficient funds from the transactions to repay two of the unsecured lenders in full. Link & Associates is the bankrtupcy trustee.
Nationwide Manufacturing Limited, a Toronto, Ontario-based manufacturer and distributor of consumer electronic products, filed an NOI on June 30. In March 2020, the company began winding down its operations, including terminating all employees and gradually liquidating all assets. Dodick Landau is the proposal trustee. Counsel is WeirFoulds for the proposal trustee.
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.