Aralez Pharmaceuticals (TSX:ARZ), a global pharmaceutical company based in Mississauga, Ontario, obtained protection under the CCAA on August 10. In connection with these proceedings, the company's subsidiaries in the US and Ireland also filed for Chapter 11 bankruptcy protection. Operating in a highly competitive industry dominated by a small number of global giants, Aralez focused on acquiring, developing and commercializing products primarily in cardiovascular disease and other specialty areas. The company incurred significant losses in recent years due, in large part, to significant costs incurred to launch sales of two new products in the US, both of which failed to reach anticipated levels of commercial success. In 2017, the company lost $125.2MM. The losses were funded partially by debt, which the company can no longer service. Following a strategic review undertaken by the company's board, the decision was made to run a sale process for the company's business and assets under court supervision. The company intends to enter into purchase agreements with two separate stalking-horse purchasers to sell its main operating businesses. One of the stalking-horse purchasers is its secured lender, Deerfield, who will also be providing DIP financing during the restructuring proceedings. Richter was appointed monitor. Alvarez & Marsal was appointed financial advisor. Canadian counsel is Stikeman Elliott for the company, Torys for the monitor, Bennett Jones for Deerfield and Goodmans for Nuvo Pharmaceuticals (the other proposed stalking horse purchaser).
Safety Seal Plastics, a Guelph, Ontario-based supplier of shrink sleeve labels and other specialty printed products to the sports nutrition, craft beer, food and other industries, was placed in receivership on August 7 on application by HSBC, the company's secured lender. The company also received a $1.5MM loan from BDC as well as equipment financing from RBC and Hewlett-Packard Financial Services Canada. In January 2018, Deloitte was retained as financial consultant to HSBC and determined that the company was out of margin on its credit facilities by approximately $1.1MM. The company's board of directors had also discovered that the company's then-president had repeatedly provided them and the shareholders with misleading financial information, documents and statements, and had misappropriated company funds for personal purposes and caused the company to enter into various transactions with parties related to him. These dealings contributed to the company's current liquidity crisis. In February 2018, the company ended its relationship with this individual, and, while under a forbearance agreement, sought to effect a refinancing or investor transaction. The process led to the company entering into a letter of intent for Labelink Products to acquire substantially all of the company's assets pursuant to a receivership proceeding. Deloitte was appointed receiver. On the same date, the court approved the transaction with Labelink. Counsel is TGF for the applicant, Chaitons for the company, Goldman, Sloan, Nash and Haber for Deloitte and Aird & Berlis for RBC.
Union Waterfront, a Richmond Hill, Ontario-based corporation that owns two real properties located at 12 Lakeport Road and 16 Lock Street in St. Catharines, Ontario, was placed in receivership on August 3 on application by FirstOntario Credit Union, who provided the company with a $10.0MM business loan. On June 12, FirstOntario issued a formal demand on the company for payment of all outstanding indebtedness under the loan. The company failed to comply with this demand and did not offer any proposal to FirstOntario. msi Spergel (ICIN) was appointed receiver. Counsel is Scarfone Hawkins for the applicant and Simpson Wigle Law for the receiver.
Park Terrace Development, a company owned by Harvey Ambrose that owns real property at 8923 Chippawa Creek Road, Niagara Falls, Ontario, had its property placed in receivership on August 2 on application by Romspen Investment, owed over $139.0MM. Rosen Goldberg was appointed receiver. Dickinson Wright is counsel to the applicant.
2546456 Ontario, a Thornhill, Ontario-based company that owns a three-unit rental building located at 558 Dovercourt Road, Toronto, Ontario, had its property placed into receivership on July 30 on application by Money Gate Mortgage Investment Corporation, owed approximately $611.0M. When the mortgage was not paid on maturity, Money Gate issued a formal demand for repayment and a Notice of Intention to Enforce Security. Ira Smith Trustee & Receiver was appointed receiver. Steinberg Title Hope & Israel is counsel to the applicant.
First Access Funding, an Ontario and Alberta-based privately held finance company that specializes in the origination and servicing of non-prime auto loans, filed a proposal on July 27, listing approximately $50.MM in liabilities. The company helps its customers establish or re-establish credit through non-traditional auto financing, and provides lending through dealerships across several provinces. Grant Thornton is the proposal trustee. Counsel is Foglers for the company and BLG for the proposal trustee.
Impopharma, a Concord, Ontario-based facility specializing in the development and testing of pulmonary and nasal drug delivery systems and ophthalmic and dermal products, filed an NOI on July 25. Richter is the proposal trustee.
Ingenious Packaging, a Scarborough, Ontario-based company that provides customized label solutions for every market, was placed in receivership on July 24 on application by BMO. The company is currently in default and its financial situation continues to deteriorate; as such, it can no longer afford to operate its business. Since March 2018, the company and its financial advisor, Mesirow Financial, have worked to address the company's significant challenges and implement a transaction to maximize value. The court was satisfied that the company's pre-receivership sale process had already resulted in the highest possible offer for the business and held that there was no need to run a further sales process, approving a sale transaction on the same day as the receivership order. Deloitte was appointed receiver. Counsel is BLG for the applicant and Goodmans for the receiver.
Virk Hospitality, a Toronto, Ontario-based company that owns a hotel and conference centre, was placed in receivership on July 23 on application by the receiver of the Paramount Group. The company defaulted on its debt obligations and, as a result, a receivership proceeding has commenced in order to sell the underlying assets and repay approximately $32.0MM in secured debt due to the mortgage holders. Grant Thornton was appointed receiver. Chaitons is counsel to the applicant and receiver.
CrowdSpark Technology, a Toronto, Ontario-based subsidiary of the Australian technology and media company that engages in web-based and mobile software to help businesses gather and publish user-generated content, filed for bankruptcy on July 18. The company was founded by Alex Hartman in 2012, with its core technology developed by a French national news wire to deal with the volume of user-generated content it received during the Arab Spring in 2011. The company eventually went on to raise over $37.0MM from investors. Hartman, who rose to prominence as Australia's youngest tech entrepreneur in 1996, was deposed from the board in 2016 after Seven West Media took an 18.7% stake in the business. EY is the bankruptcy trustee.