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.
4 Birchmount Road, a vacant, detached two-storey home in Toronto, Ontario, was placed in receivership on April 13 on application by B & M Handelman Investments et al., owed approximately $900.0M. The funds were initially advanced to Christine Drotos and secured by a second mortgage against the property. When Drotos failed to repay the funds when the mortgage matured, Ara Missaghi offered to purchase the applicants' loan. This transaction was never completed. Instead Missaghi made partial payments on the mortgage. In addition, Missaghi represented that he was continuing to service the first mortgage on the property, which was owing to Pillar Capital Corporation (not to be confused with Pillar Capital Corp. out of Calgary, Alberta), a lender which appears to be owned or controlled by Missaghi. A recent mortgage statement provided to the applicants by Pillar, however, did not reflect any credit for the interest payments which Missaghi allegedly made. Concerned that Missaghi may have inflated the amounts claimed to be due and owing pursuant to the first mortgage in an attempt to prejudice their recovery under the second mortgage, the applicants' moved to appoint a receiver to sort through the various encumbrances registered against the property. Rosen Goldberg was appointed receiver. Dickinson Wright is counsel for the applicants.
HB Solar Canada, a Concord, Ontario-based supplier of photovoltaic/solar energy array mounting systems and related equipment, filed an NOI on April 10, listing $2.9MM in liabilities, including $800.0M to RBC. By 2016, the company had reached the number one position in the Ontario market for solar rooftop racking. However, a confluence of factors eventually led to its insolvency. First, the local market for solar rooftop systems contracted by approximately 80% when changes were made to the Feed-In Tariff Program, which was launched in 2009 to encourage and promote greater use of renewable energy sources. Second, the company faced increased competition, thus forcing it to reduce prices and earn lower margins. Finally, it experienced a rise in bad debt write-offs and an accompanying reduction in available net working capital. Although the company has increased its efforts to attract additional capital from lenders and investors, no one is willing to invest further if there is no formal restructuring. As a result of these issues, the company now faces a liquidity crisis and is unable to maintain its obligations to creditors. Dodick Landau is the proposal trustee. Pallett Valo is counsel to the company.
Syncordia Technologies and Health Solutions (TSX-V: SYN), a Toronto, Ontario-based investment firm focused on acquisitions and investments in the US healthcare space, was placed in receivership on April 6 on application by Deans Knight Capital Management, owed, along with certain other noteholders, approximately USD $14.3MM. Due to a decrease in cash flow from its portfolio companies, Syncordia has been unable to service its debt. Waivers were obtained through 2016 and 2017. Pursuant to these waivers, the company was required to divest of certain of its investments to pay down its debt. These divestitures were not completed and in April 2018 the noteholders demanded repayment. Grant Thornton was appointed receiver. Counsel is Cassels Brock for the applicant.