Escalade IT Solutions, Escalade IT, Escalade Information Technology Solutions

Escalade IT Solutions, Escalade IT, Escalade Information Technology Solutions, an Ottawa, Ontario-based IT consulting company, filed for bankruptcy on October 4, listing $139.9M in liabilities, including $108.2 to Accellion, a private cloud solutions company. Raymond Chabot is the bankruptcy trustee.

Alfacon Solutions

Alfacon Solutions, a Milton, Ontario-based material handling equipment supplier, filed an NOI on October 1, listing $10.8MM in liabilities, including $2.1MM to RBC. MNP is the proposal trustee.

Intelligent Mechatronic Systems (“IMS”) and Ridetones

Intelligent Mechatronic Systems ("IMS") and Ridetones, Waterloo, Ontario-based technology companies in the business of developing and delivering advanced end-to-end mobile in-car solutions aimed at enhancing driver behaviour, were placed in receivership on September 14 on application by B.E.S.T Active 365 Fund LP et al., owed approximately $16.4MM by IMS and $12.1MM by Ridetones. The companies, which have been in default since March 2017, remain in default at present. Since these defaults arose, the companies have engaged in company-led efforts to refinance their indebtedness and/or sell its shares or assets. All refinancing and sales efforts have failed, however, to lead to any transaction which would have allowed the companies to repay their indebtedness. In early May 2018, in response to their financial difficulties, the companies' engaged Iberis Advisors, an outside investment bank, to administer a sale and investor solicitation process. This effort, too, proved unsuccessful. The companies are currently facing urgent and pressing liquidity issues, and their lenders are no longer willing to support them. PwC was appointed receiver. Counsel is Bennett Jones for the applicants, Norton Rose Fulbright for the companies and BLG for the receiver.

Boss Logo Print & Graphics

Boss Logo Print & Graphics, a Markham, Ontario-based trade printer was placed in court-appointed receivership on September 4, on application by TD, owed approximately $3.3MM. The company then filed for bankruptcy on September 14. Established in 1995, the company evolved into an industry leader in online trade-printing services. Despite recently purchasing additional presses and other equipment, the company has been unable to recover from the financial difficulties it experienced over the past several years. MNP is the receiver and bankruptcy trustee. Counsel is Aird & Berlis for TD and Lerners for MNP.

The Kraus Group

The Kraus Group, a Waterloo, Ontario-based manufacturer of premium carpet for the commercial and residential market, obtained protection under the CCAA on September 11, owing approximately $48.2MM to Wells Fargo, its senior secured lender. Established in 1959, the Group comprises 12 entities and operates two large carpet-manufacturing and logistics facilities. The Group also has two business divisions: the manufacturing of broadloom carpets ("Broadloom Business"), which accounts for 46% of its revenues, and the distribution and sale of flooring products ("Flooring Business"), which accounts for 54%. Over the last five years, the Group has sustained substantial losses for several reasons. First, its performance was negatively impacted by the downturn in the carpet manufacturing industry due to a shift in consumer preferences to hard surface flooring and the availability of cheaper broadloom carpeting from China. Second, the Group faces significant fixed costs, including those associated with maintaining and operating its facilities. In March 2018, Hilco UK - the sole shareholder of Pinnacle Capital Resources, who is the general partner of Red Ash Capital Partners, the Group's junior secured creditor who is owed $100.0MM - engaged Deloitte Corporate Finance to assist the Group with marketing and sale of the Broadloom Business. However, due to its dire financial circumstances and the lack of a going concern transaction, the Broadloom Business ceased activity on September 8, affecting 256 workers. Florida-based QEP will acquire substantially all of the assets related to the Flooring Business. This sale provides for the continued employment of 71 Canadian employees and a cash inflow that can be used to immediately reduce the indebtedness owed to Wells Fargo. Deloitte was appointed monitor. Counsel is Cassels Brock for the Group, Miller Thomson for the monitor, and Bennett Jones for Wells Fargo and QEP.

Sameh Sadek

Sameh Sadek, an individual based in Brampton, Ontario, had his domestic assets, undertakings and properties, including several pharmacies, placed under receivership on September 11 on application by AstraZeneca Canada. The applicant anticipates that the receiver will exercise its powers to investigate and trace the substantial funds which appear to have been transferred out of Sadek's accounts to other local and overseas accounts, including to Egypt. The receiver will also secure and take possession of Sadek's assets, including two residential homes, and then commence a process to market and sell those assets. Alvarez & Marsal was appointed receiver. Counsel is Blakes for the applicant and Aird & Berlis for the receiver.

Oxford Advanced Imaging

Oxford Advanced Imaging, a Toronto, Ontario-based company that provides medical diagnostic services, including MRI and CT testing, and which owns and operates two medical diagnostic imaging clinics, had its assets and business placed under an order for sale on August 29 on application by TD, owed approximately $10.9MM. The company, which was formed by a group of four radiologists, originally acquired the business from Life Labs. Shortly after the acquisition, the company began to suffer from severe and irreconcilable disagreements among shareholding groups and board members. In particular, there was a strong discord between the company's president, Dr. Jae Kim, and the other three radiologists. The company had made a number of cash advances to related entities that did not share the same ownership as the company but in which Dr. Kim held significant equity interests. Although Dr. Kim asserted that there were good business reasons for those advances, the other doctors did not accept his claim. By the summer of 2017, the company owed approximately $1.4MM to these related corporations, which subsequently affected the company's liquidity. With the cooperation of TD, the company attempted to commence an informal winding-up of its business operations by offering them up for sale. Although the lengthy sales process eventually resulted in an Agreement of Purchase of Sale dated April 2018, a specific condition was not met; as a result, the Agreement could not be completed and was terminated by the seller. The company's business is threatened unless it is able to promptly re-market its business and complete a sale. There is public interest in keeping the clinics open and operating during the sales process as they provide 40% or more of the Ontario public's access to MRI services outside of hospital operations. KPMG was appointed sales officer. Counsel is Aird & Berlis for TD, Wilson Vukelich for the company, Foglers for three radiologists (Dr. Gordon Cheung, Dr. Davinder Gill, Dr. Deep Chatha) and Dentons for KPMG.

2301132 Ontario and 2309840 Ontario

2301132 Ontario and 2309840 Ontario, who own five parcels of land in Georgetown, Ontario, filed NOIs on August 24. The companies' secured lenders are Home Trust, HarbourEdge Mortgage Investment, Building & Development Mortgages Canada (i.e. Fortress), JYR Real Capital Mortgage Investment and Stasis Group. KSV Advisory is the proposal trustee. Counsel is DLA Piper for the companies and Bennett Jones for the trustee.

Niska North

Niska North, a Chapleau, Ontario-based company that carries on business as a sawmill manufacturing cedar lumber products, was placed in receivership on August 24 on application by Northern Ontario Heritage Fund Corporation, owed approximately $2.1MM. The company ran into business difficulties in 2008 almost immediately after it purchased a sawmill plant formerly owned by Domtar, citing unfavourable market conditions and lack of profitability. In December 2010, the company completely ceased operations, shutting down the sawmill and laying off all its staff. While the company's manager has made several efforts over the last seven years to find a buyer, they have been unsuccessful and the sawmill is currently abandoned. The court approved a sales process for the sawmill and appointed A. Farber & Partners as receiver.

Laplante Welding of Cornwall

Laplante Welding of Cornwall, a Cornwall, Ontario-based construction company specializing in detailing, fabrication and erection of structural and miscellaneous steel buildings, filed an NOI on August 20, listing $8.5MM in liabilities, including $2.1MM to RBC. Design, supply and install was the core business model that allowed the company to grow as a structural steel contractor for over 35 years in the Cornwall, Ottawa and Kingston markets. The company also provides manufactured products to Toronto, Western Canada and Northeastern United States. Due to cost overruns on some specific installation contracts, the company ran into financial difficulties and now intends to restructure and refocus on fabrication, its core business. MNP is the proposal trustee. Counsel is MBC Law for the company and Soloway Wright for RBC.